Obama Announces changes to HARP Loan modifications for all Fannie and Freddie Mac Loans?

This is breaking news as the Obama administration has side stepped Congress to help underwater homeowners refinance their higher interest loans at today's lower rates.  This could be a big step forward to helping underwater homeowners here in Manatee and Sarasota counties get into a more manageable payment that they can afford.
Some big unanswered questions.
1.  Will this program help people who are behind in their payments?  Or just upside down and current?
2.  Will this program expand to non Freddie Mac and Fannie Mae loans?  (I would hope so)
3.  What will be the credit requirements to obtaining a refi?
4.  Will principle reductions be a part of the equation?

Home Affordable Refinance Program (HARP) Changes

 Today, the Federal Housing Finance Agency announced enhancements to the Home Affordable Refinance Program (HARP), and extended the program until Dec. 31, 2013. The changes are designed to expand the number of borrowers with little or negative equity who can qualify for refinancing. It is possible you will receive calls from customers inquiring about their eligibility for the program. Wells Fargo will be working as quickly as possible to have the changes in place and available to borrowers. However, we will not be able to determine when we will be able to offer the program enhancements until we receive the specific program guidelines – expected in mid-November – and have the chance to interpret them and make the appropriate process and potential systems changes.

Here are talking points you can use if you receive inquiries:

·         The Home Affordable Refinance Program allows homeowners in good payment standing, whose loans are owned or guaranteed by Fannie Mae or Freddie Mac, to refinance and take advantage of today’s low interest rates.

·         The program is especially helpful for customers who cannot obtain a standard refinance because their property value has declined.  

·         The Federal Housing Finance Agency announced enhancements to this program today that will allow more customers to qualify.

·         Only borrowers with a loan sold to Fannie Mae or Freddie Mac before May 31, 2009 are eligible to refinance through HARP. In addition, borrowers who already have refinanced through HARP are not eligible to refinance through the program again.

·         Fannie Mae and Freddie Mac plan to send the program guidelines required to offer this program to all lenders in mid-November. When we receive them, we will work quickly to make the changes required to support the implementation, including any potential changes to our systems in order to offer the program to our customers as soon as possible.

·         It will take some time until the new HARP features will be available through Wells Fargo.

In the meantime, the current Home Affordable Refinance Program remains available for customers who qualify and borrowers who aren’t eligible for HARP may qualify for other refinancing options.


U.S. to overhaul mortgage-refinance program: WSJ

By Michael Kitchen
LOS ANGELES (MarketWatch) — The Obama administration plans to announce major changes to a mortgage-refinance program that include eliminating restrictions for those whose homes have fallen significantly in value, The Wall Street Journal reported late Sunday, citing unidentified U.S. officials. The overhaul to the "under-used" program would also end required appraisals and extensive underwriting for most participants, so long as they have stayed current on their mortgage payments, the report said. President Barack Obama is slated to speak on the changes at a speech Monday, the report said.
·         Requires borrower to be current on their loan payments—no other requirements
·         Makes no difference how far underwater their home is
·         Will eliminate appraisals and extensive underwriting requirements for most borrowers
·         FHA, Fannie Mae and Freddie Mac have agreed to eliminate some fees in some circumstances
·         CoreLogic estimates 20 million homeowners could qualify—one out of four homeowners in the country
·         At a $400 per month loan payment reduction ($4,800 per year pre-tax), this potentially could put $96 billion annual in consumers pockets without increasing U.S. government or consumer debt 1 cent – consumers spending that would spur an economic recovery
·         Could potentially keep one out of four distressed properties off the market significantly reducing shadow inventory and expediting a recovery in the housing markets
·         Federal government will collect more income taxes as homeowners will have less interest deductibility
·         Since none of these existing loans had prepayment penalties, all current investors in those loans knowingly had the potential of repayment at any time

Posted via email from Joe Murphy Knows Real Estate in Bradenton

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  1. Hi Joe, I counsel clients who are upside down in their homes as to the options available to them. The two main options that my clients tend to choose are 1) to refinance their home if their mortgage balance does not exceed the value of their home by too much OR 2) to short sell their home if it the value of their home is far less than their mortgage balance. Prior to this program that allow homeowners to refinance their home loan regardless of how far upside down their home is, most of my clients were left with little choice other than to short sell their home. Now, even if their home is far under water, many of my clients are choosing to refinance under the new HARP refinance program. -Michael Wyckoff, Esq., Lawyer and Mortgage Consultant

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