Freddie Mac said today that it would be opening up refinance opportunities to borrowers who are not underwater on their existing Freddie Mac mortgages. Under the company’s Relief Refinance Mortgage Program which includes the Home Affordable Refinance Program (HARP 2.0) the requirements for refinancing mortgages with loan-to-value ratios at or under 80 percent will be brought in line with those with LTVs over 80 percent, the target audience for HARP 2.0 loans.
Big F’deal Deal.
How about helping the people with the HIGHER loan to values that need the help and can help save the economy!
The mandate for this program squarely was for the agencies to help alleviate the burden of high mortgage payments for those that have steadfastly remained loyal to their homes.
Instead, they are forcing people to go into foreclosure and therefore lower home values more. The National Association of REALTORS should be furious at this, but to my knowledge, there has not been any further pushing of the agencies and Mr. DeMarco of the FHFA to push for higher LTV refinances and realistic guidelines.
Instead, the idea of burdensome little details that don’t mean anything just keep annoying the people that deserve the help.
It’s not a government handout, it’s not a principal write down, it’s not a back door, sneaky was of reducing your monthly payment. It was a sensible solution to a stubborn problem caused by the fraud of others and the greed of the institution of sub-prime mortgages.
Ok, enough ranting. The point is that you need to carefully see that you qualify for a HARP loan and that the if you don’t but deserve to, contact your Congressperson and the person running against them (since they are all up for election!). Make a stink. Hold a neighborhood meeting if they don’t help you.
Yes, you have the power, you just have to take time and use it instead of not getting involved.
Yes, this is more important than which swimmer wins the Olympic medal. Why do you care how much one of these guys/girls makes in endorsement money afterwards?
Start your own mortgage Olympics! Hard work and dedication will pay off!
UPDATE 8/1/12
This is from an update from Rob Chrisman’s blog about the Freddie relief changes:
Freddie’s announcement boiled down to it opening up refinance opportunities to borrowers who are not underwater on their existing Freddie Mac mortgages. Under the company’s Relief Refinance Mortgage Program which includes the Home Affordable Refinance Program (HARP 2.0) the requirements for refinancing mortgages with loan-to-value ratios at or under 80% will be brought in line with those with LTVs over 80%, the target audience for HARP 2.0 loans. This is much more in line with Fannie’s program, although details won’t be available until mid-September and go into effect in January.
The alignment will involve eliminating many of the representation and warranty requirements that exist on the mortgages being refinanced. It is hoped this will act as an incentive to lenders to promote the loans. Freddie Mac said it is further evaluating the Relief Refinance program, specifically looking at the Open Access offering to determine the best way to reach eligible borrowers and assist lenders in managing capacity. Open Access is designed to promote competition so that borrowers can obtain Relief Refinance Mortgages including HARP 2.0 from lenders other the one associated with their existing servicer. Open Access is the cross-servicer streamline refinancing program within Freddie Mac’s HARP streamline refinancing offering.
Investors are keenly interested in this, as you can imagine. The proposed HARP 2.0 changes by Freddie could boost pre-HARP prepayment speeds. And no one wants to pay 105 for a loan and then have it pay off at 100. The changes will most likely involve some form of easing of cross-servicer reps and warranty requirements, potentially bringing them in line with those for same servicer. The same-servicer Relief Refinance program eliminates most rep and warranties for same servicer refi’s of loans with LTV’s greater than 80%, but originators point out there are three key hurdles to cross servicer HARP refi’s: 1) different rep and warranties from same servicer refi’s, 2) capacity constraints and 3) slightly adverse economics for such refi’s. Whereas the latter two will remain unchanged, making reps and warranties similar should still result in an increase in cross servicer refi’s, impacting investor’s appetites for pools.
In addition, Freddie Mac also announced that it would align requirements for less than 80% LTV loans with those for greater than 80% LTV loans. This would include aligning rep and warranty guidelines, a notable change given that greater-than-80% LTV refi’s currently enjoy significant rep and warranty waivers. Additionally, it is also likely that the LLPA (loan level price adjustment) caps that currently exist for higher LTV loans will be extended to less than 80% LTV loans. But perhaps it is much ado about nothing – Fannie Mae already has uniform rep and warranty waiver guidelines across LTV’s, and analysts have not seen much difference in prepayment speeds between Freddie and Fannie pre-HARP less than 80% LTV loans. Most of the HARP 2.0 refi’s have been in the very high LTV range.
