HARP 3.0 Refinance Possible #MyRefi Updates For Michigan Homeowners
What Will The HARP 3.0 #MyRefi Update Look Like When It Finally Goes Into Place?
Now that the election is over there are plenty of rumors floating around about what President Obama will do to continue to support the Housing Market. Let’s take a brief look back at what has happened thus far.
What is the HARP Refinance Program?
HARP stands for “Home Affordable Refinance Program” and it was designed to assist underwater Homeowner’s take advantage of lower interest rates. The program only works for loans that are currently backed by Fannie Mae or Freddie Mac by the date of 05/31/2009.
History of HARP Refinance Program Guideline Updates
HARP 1.0 had minor success when it rolled out in 2009. The initial program had loan-to-value restrictions capped at 105% which greatly limited the effectiveness as most folks at that time were deeper underwater.
HARP 2.0 has fared much better since its release in late 2011. Your loan-to-value (how much you owe on your home vs. how much your home is worth) has NO cap now. This combined with the interest rates hitting all time lows has helped folks lower their monthly payments dramatically which in turn has reduced the number of foreclosures.
Operation Twist is a program conducted by the Federal Reserve to help stimulate the economy by keeping interest rates artificially lower. The Fed is buying longer-term Treasuries and simultaneously selling some of the shorter-dated issues it already held in order to bring down long-term interest rates
HARP 3.0 – Awaiting Official Updates
Harp 3.0 News: Guideline Updates – Here’s What We Might See
In January of 2012, President Obama released details on a broad based refinancing program to assist ALL borrowers, regardless of who secures their mortgage. HARP is not currently designed to help the millions of folks who have loans that are not secured by Fannie or Freddie. This could change in HARP 3.0.
You can also follow along with the President’s plan on Twitter at #MyRefi.
There are many folks who have purchased or refinanced after May of 2009 who have rates above 5.0%, yet are still underwater. It is rumored that the 05/31/2009 cut-off date will be extended or eliminated all together in the HARP 3.0 update.
Currently HARP only allows for a one time usage of the program. There is anticipation that this will be waived for HARP 3.0 which helps even more folks take advantage of the historic low interest rates.
The Fed will continue to purchase Mortgage-Backed Securities as needed in 2013 to keep long term mortgage rates low.
How Would Michigan Residents Benefit from HARP 3.0
Michigan homeowners were one of the largest hit groups from the housing collapse due as it hit us first and the hardest. The coinciding auto crash saw jobs lost and leave the state in large numbers. We witnessed homevalues plummit by 50% or more in a few short years, vanishing equity in Oakland, Wayne and Livingston counties specifically.
We have seen some success with HARP 2.0 in Michigan (40.72% of all refinances in Michigan were from a HARP transaction in January 2013), there are still hundreds of thousands of underwater homeowners. Home values in Michigan continued to drop well after 2009, so many people who bought their homes after the cut off are currently underwater on their mortgage. Many folks in Southeast Michigan did take advantage of the HARP refinance program once, but could still lower their rate and refinance again if they were allowed to. We are on the right path with home values climbing steadily again, but bottom line is there are a ton of people who still need this update to happen!
Also, you can follow us on Twitter @MiHomeLoans_FCF to keep up to speed on any new developments with the HARP 3.0 Refinance Program. #MyRefi