New HARP could help up to 6.7 million - WDRB 41 Louisville - News, Weather, Sports Community
Louisville, KY HARP Mortgage Lender
Joel Lobb
(NMLS#57916)Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
By Peter King
Provided by 
Recent changes to HARP mean that some 6.7 million homeowners will be eligible to refinance their mortgage to a lower interest rate under the government-backed program.
That's according to a new analysis by the real estate analytics firm DataQuick. The company estimates that's how many borrowers could potentially benefit from a recent change to the program that allows borrowers to refinance regardless of how far underwater they are on their mortgage.
Limit on underwater refinancing removed
Mortgage servicers are currently implementing several changes to the program, which were announced by the Obama administration last fall. Chief among them is the elimination of a limit on how far underwater a homeowner can be on their mortgage and still qualify for the program.
Previously, the balance on mortgages refinanced through HARP could not exceed 125 percent of the home's current value; the changes announced last fall eliminated that cap entirely. Homeowners must still be current on their mortgage payments to qualify.
More options for borrowers
Other changes to the program were designed to make it easier for homeowners with private mortgage insurance (PMI) to refinance or to obtain a HARP mortgage refinance with a lender other than their current mortgage servicer.
In addition, new limits were placed on the fees lenders could charge up front for refinancing a low-equity or underwater mortgage, known as loan level pricing adjustments. The new rules limit such fees to a one-time charge of 0.75 percent of the loan balance, down from 2.0 percent previously, and completely eliminate such fees on mortgages refinanced into a term of 20 years or less.
Will lenders go along?
Although the new rules have been out for several months, many lenders are still incorporating them into their mortgage refinance programs. Even so, it's not clear how many homeowners will actually benefit. The program is voluntary for lenders, and many homeowners who have applied for a HARP refinance in the past have been turned down despite qualifying under the official guidelines.
That's because even though HARP has its own set of guidelines for which mortgages will be approved for refinancing, lenders have their own guidelines as well, which may be considerably more stringent. As a result, to date only one million homeowners have been able to refinance their mortgages under HARP, compared to a projected 4-5 million when the program was launched in spring 2009.
HARP stands for the Home Affordable Refinance Program, which is designed to enable homeowners with little or no equity to refinance their mortgages to the historically low interest rates that have been available over the past two years.
Joel Lobb
(NMLS#57916)Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
HARP stands for the Home Affordable Refinance Program which was a government sponsored initiative released in March of 2009 by President Obama in response to the needs of homeowners suffering during the mortgage crisis. The Louisville, KY HARP Mortgage is a part of the Making Home Affordable Program that was created to provide payment relief to Louisville, KY homeowners that were behind on their mortgages due to financial hardships and the opportunity for Louisville, KY homeowners that were under water on the their mortgages.
Since many Louisville, KY homeowners were caught in a time period of rapidly declining property values there was a need to create a refinancing opportunity for those that lost significant value in their properties but made their mortgage payments on time. The intended benefit of the HARP Mortgage was to make refinances available to Louisville, KY homeowners that were under water on their homes that would lower their interest rates and payments. It was believed that the Louisville, KY HARP Mortgage would also protect Louisville, KY homeowners from their existing toxic adjustable rate and interest only loans with opportunities for more stable fixed rate mortgages. For those Louisville, KY homeowners that were doing well financially and simply under water on the mortgage, the HARP Mortgage offered a lower interest rate on a reduced mortgage term which would help the borrower erase negative equity within a much shorter period of time.
There were high hopes for the HARP Mortgage and while it helped thousands of homeowners to reduce their interest rates, lower their payments and get out of loans that could suddenly adjust the monthly payments upwards, the 125% negative equity ceiling did not allow millions of homeowners that had greater losses in property values to take advantage of the program. In theory, there was nothing wrong with the HARP Mortgage Program. The 125% loan to value restriction left a lot of good paying Louisville, KY mortgage holders out of the opportunity to refinance at the low market interest rates. If there are any knocks on the way the program was originally written it would have to be that the equity ceiling was a little short sighted. The HARP Mortgage did not help enough of the Louisville, KY homeowners that it was designed to. In March of 2012, the rules for the HARP Mortgage have changed and the combination of historically low interest rates and a significant equity guideline change, it is believed that millions more homeowners will get the help that they deserve
Joel Lobb
(NMLS#57916)Senior Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.com
Key Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*
Louisville, KY HARP Mortgage Lender
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