The first HARP loan was basically a refinance loan to allow borrowers with no equity in their property to refinance into today’s lower rates. A borrowers loan must have been bought by Fannie Mae or Freddie Mac and were funded before May 31, 2009.
The cap of the loan was at 125% of the homes current value, so the maximum loan for a property valued at $400,000 could be no more than $500,000.
On October 24th Fannie Mae and Freddie Mac came out with new HARP guidelines. They will take effect on or around November 15th.
Some of the changes to the original HARP:
- The 125% cap has be lifted, so there is no maximum % the borrower can be underwater.
- Reduced fees that a lender can charge
- Reduced appraisal requirements, may even be automated
- Fannie Mae or Freddie Mac cannot ask lenders to buy back the loans if they go sour….This is a big one!!
- No add on to interest rate for negative LTV.Every lender will implement the HARP at different times and maybe in phases as this is a VOLUNTERY program for lenders, they do not have to participate.
Here is the link to the website which has more details of the program.