HARP Program | Affordable Refinance HARP Extension

This week, the Obama administration announced that one of their stimulus packages meant to help struggling home owners would get a one year extension. The Home Affordable Refinance Program or HARP, a refinance program meant to help homeowners with underwater mortgages, will now run through June of 2011. Critics of the program are skeptical that the extension will make any difference, as so far the program has only managed to help around 200,000 mortgage holders. Originally, the Obama administration was hoping it would help up to five million.

The Obama administration is hoping that by extending the length of the program more homeowners can be helped. Michael J. Williams, president and chief executive officer of Fannie Mae said,

“Thousands of families have already received much needed relief … extending HARP for another year will enable us to help even more families.”

HARP is meant for homeowners who have not been able to refinance their loans into current low rates because their loan is underwater, meaning that their home is worth less than their mortgage. With the collapse of the housing market, millions of homeowners across the country are in the predicament of having an underwater mortgage. In some states, mainly those hit hardest by the housing market collapse, as many as 50 percent of homeowners are underwater. The program currently helps homeowners that are underwater by as much as 25 percent.

The program to date has had some snags. Many homeowners have been turned away because they were too far underwater to qualify for the program. Another downside is that the only loans that qualified for the program were those that were backed by Fannie Mae or Freddie Mac. At the beginning there were numerous delays and the process has been very slow for homeowners who have managed to qualify and take advantage of the program. Homeowners with second mortgages have also found it difficult to qualify.

Finally, with closing costs being high and the other expenses that go along with refinancing, many homeowners thought that the overall benefit was just not worth it. Only time will tell if the extension will indeed help more homeowners save their homes.

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15 Responses to “HARP Program | Affordable Refinance HARP Extension”

  1. Betsy responded on 04 Mar 2010 at 11:22 pm #

    On face value these are great loans. But besides the obvious that a good portion of homeowners are underwater by more than the 25%, unfortunately most lenders are requiring that only $5,000 of the loan costs can be rolled into the new loan amount. Also some lenders will only allow 5% over the property value if they aren’t the lien holder. Most homeowners are already strapped for cash so that is one of the main reason why these great loans aren’t being pushed as much as they could be.

  2. Charlene responded on 06 Mar 2010 at 5:54 pm #

    I feel the HARP program is a JOKE. This program was designed for Neg. Arm loans. However Aurora Loans bases your eligibility on the lowest payment due. This is crazy. If I paid the lowest payment I would back end load 1300.00 per month onto a house that is already upside down. Other than that I would have been more than eligible for the loan and able to maintain my payments and keep my home…It is all a scam and joke.

  3. Kevin Benner responded on 10 Mar 2010 at 2:26 pm #

    Just seems that these mortgage programs are only meant to make the politicians feel good. Give them talking points about all the great things they are doing. When in fact the pain is no less real for the consumer.

  4. nicole responded on 19 Mar 2010 at 6:34 pm #

    This program is a joke. I’ve spent the last 5 days on the phone with my mortgage company (3 reps and a sales manager), fannie mae (tier 1 and tier 2 reps), 888-955-hope, and the ‘counselor’ that 995-hope sent me to. All I want to do is refinance my loan, and according to the 4 ‘criteria’ that are advertised it seemed we were a shoe in. But what isn’t advertised is the ‘secret criteria’…i.e. you can’t have had a stated income loan when purchasing. Why does that friggin matter if we want to use this program to refinance our home full doc? Ridiculous. Nice political stunt Obama. And you wonder why only 200,000 people have used this when you claim it will help 5 million. Ridiculous.

  5. Jeremy responded on 19 Apr 2010 at 7:24 pm #

    This program is a freakin’ joke that doesn’t reward responsible home owners that have been paying on their loans.

    What a joke obama.

  6. jeff responded on 18 May 2010 at 8:42 pm #

    HARP is a JOKE! My real home value is $320,000 with comps to show. I locked in my rate @ 5.75 which was .75% above the current market rate. Thier EPV value said my house was worth $298k. I said fine ill bring a lil cash to the table to get my loan to 125% LTV. 120 days later my loan has still not closed!!!!! Now they say my home is EPV of $290K Now I have to bring 25K to the table to refi into a above market rate loan. They have “lost” my HOA umbrella insurance doc, then 1 weeks later “dont have my bank statement copies” I have a signed FEDEX copy saying they recieved it. Its all lies and bullshit! Banks are not helping anyone!

  7. Very nice note. Thanks. Yep, it seems very strange, stepping back and looking at the bigger picture that this program, supposedly designed to help out financially really does the opposite. Here are two very crisp examples in my case: 1) The HELOC money responded on 29 May 2010 at 8:22 am #

    It seems very strange that this program, supposedly designed to help out financially really does the opposite. Here are two very crisp examples in my case:

    1) The HELOC money I am investing to generate much more income and IMPROVE my qualifying condition is disallowed. In fact, it is required that I stop making great dollar returns on that money which would help me to “qualify”, and even close out and give up those tools. This actually would drive me into a much worse income situation. It HURTS me many times over (100-500 times over) financially to do that. Makes no sense at all.
    2) This program supposedly is to help people by lowering a mortgage payment and improving therefore, my financial position and ability to pay. What it really does is denies those in serious real need aby making it much too hard to qualify. HARP is really useless because it is too hard to qualify and too costly to implement. I have experience qualifying on a good number of loans in the past and I must say that I would do better to just go get a regular mortgage off the street. The HARP program has denied me even though I have quite good assets and income and can demonstrate a very responsible financial history. It seems to contradict itself. This program actually says to me that if I want to lower my mortgage payment $170 per month, I’d have to pay $3500 in fees, AND give up an asset that produces lots of income. The HARP program seems to be a financial destruction program, not an aid…. Food for thought.

  8. Candy Small responded on 25 Jun 2010 at 8:40 am #

    Good post, The Home Affordable Modification Program or HAMP lowered my interest rate to 2%. Now my kids are going to be able to grow up with a backyard. The application was so confusing then my neighbor’s husband filled it out with me & I was approved in 28 days.

  9. ap responded on 30 Aug 2010 at 6:47 pm #

    I live in Phoenix, I put 85k down in 07. I work in the industry and never cheated or lied. I needed help and I got stuck with a Freddie loan, Wells said- We cant help you unless you are delinquent, 9 months later- we cant help you because your deficit is over 200.00 a month, 9 months after that- we cant help you because you are over 125%. I am sick of this. The only people who are getting help are the ones who cheat the system or cheated it in the first place. I lost my investment but really want my home and now I am stuck with a payment that could be much lower if the government would actually think of a plan that didnt benefit their deep pockets. It is high time that these originators pay for the fat vacations and nice houses they had when everyone was living high on the hog and start taking care of the now lower middle class that has been paying taxes and benefits to keep them employed. OK Obama wheres MY handout??

  10. pam responded on 17 Nov 2010 at 9:54 am #

    Hi. Tried to deal w/ citimortgage, applied for modification(s) in June 2010–the HAMP, and conventional for which citi has their own version. My NVP prevented me from getting the HAMP, they said (my debt to income is 67%). Then I wasn’t deemed eligible for citi’s version. I called the HOPE, had 3 3-way calls with citi’s loss mitigation dept., different voices there of course, and got 3 different reasons why I was not eligible for even refinance-in Sept. 2010, FHA began short-refi’s for non-FHA mortgagees–which includesme (Freddie.) But, Freddie does not support this program, which is contingent with both agencies agreeing to the refi. citi also said I do not have a code on my loan. Huh? They need a specific code if I am to refinance. No one knows anything about why I don’t have it, or how I can get it. I am current on my mortgage, but I don’t know for how long. I want to stay here. The only things citi will do for me is trial mod (me: “but that will put me in delinquincy”, citi: “you can’t have your cake and eat it too.”); short sale; deed in lieu. My former realtor told me she saw that warehoused mortgages (which mine was) mostly are funded with a clause that says the borrower may not refince. Trying to find out more on that one.

  11. monte responded on 03 Feb 2011 at 5:24 pm #


  12. house extension builders. responded on 14 Mar 2011 at 8:16 am #

    Great post, i might be a bit stupid but i cant find a rss feed.

  13. Tim responded on 23 Dec 2011 at 5:42 pm #

    Unless the banks are willing to write down the outstanding balance owed on underwater mortgages, I will go back to sleep…. (Translation: the banks need to address the real problem – not the interest rate, refinancing, etc., but the fact that the property is not worth what you are paying – you are throwing good money after bad and the best option is to walk away).

  14. mal responded on 30 Dec 2011 at 1:13 pm #

    If the bone head in the Oval office really wanted to do something for this country he would tell the banks it is time for payback from the bailouts. What should be done is one should be able to walk into their mortgage lender and buy down there current rate for one standard fee. No BS involved. I make 120K with a 170k mortgage and when I went to refinance they took my $500.00 rate lock fee and sent me packing because the house I currently own and finance through them was appraised to low. I am a very qualified borrower for this mortgage and have impeccable credit yet I can’t take advantage of the low rate. This idiot could care less about Americans and their future.

  15. Marlin Dolese responded on 30 Jun 2012 at 6:34 pm #

    i think that the stimulus package really can kick start the economoy of those nations around the world that are suffering from economic recession. i hope that our economic climates will get better.

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