HARP 3.0 Requirements Reviewed In A New Guide From LoanLove.com

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A recently published HARP 3.0 guide from Loan Love takes a look at what updates a new program would likely bring and who would be eligible for the program.

LoanLove.com is a borrower advice website that provides up to date and in depth information in a format that is valuable to the most experienced home owners while still being accessible to those who are just starting out with applying for their first home purchase loan. The website, which has quickly become a trusted destination for current news and expert loan advice, empowers homeowners with first class knowledge, valuable resources, and connections to top rated industry professionals. A recent article from the loan advice website takes a look at the proposed new HARP update and discusses what HARP 3.0 requirements would be put in place.

Loan Love explains, “Home values have continued to rise, but there are still millions of homeowners unable to refinance because their properties lost too much value during the housing market meltdown of a few years ago. If you are one of those millions, help could be available to you through one of the best-kept secrets among government housing programs: the Home Affordable Refinance Program (HARP). If you haven’t heard of HARP, you aren’t alone.”

The Loan Love article goes on to explain that the current HARP program (HARP 2.0) was made available to homeowners who are up to date on their mortgage payments but who are stuck in unfavorable and predatory mortgage situations and were previously unable to refinance to better terms. These are people whose homes’ values plummeted during the economic crisis and were unable to procure traditional refinancing. The program provides a way for such homeowners to refinance to a more affordable and stable mortgage situation.

The original HARP program got an update in March 2012 with a new incarnation given the name HARP 2.0. This new program was vastly improved from the original version where, despite assistance, more than half the participants fell back into foreclosure. However, this updated version is still lacking on some fronts. The Loan Love guide says,

“While HARP has helped over 3 million home owners, it is not without its shortcomings. First, even when borrowers successfully met Fannie Mae and Freddie Mac guidelines, they often found it difficult to locate a lender who would approve a HARP 2.0 loan. Second, if a loan was not owned by Fannie Mae or Freddie Mac, it did not qualify for the current HARP program at all. These two significant challenges have fueled support for creating a new and improved version of HARP legislation. There are some who believe this would best be done through an entirely new piece of legislation, or HARP 3.0, that would target borrowers with loans originating before June 1, 2009, and not be constrained to working only with loans owned by Fannie Mae or Freddie Mac.”

This proposed update to the HARP program will likely have its own set of requirements that will differ at least in some points to the current requirements for eligibility. However, while it is impossible to determine what HARP 3.0 requirements would be put in place, taking a look at current requirements for the HARP 2.0 program may give a general idea of what to expect. The Loan Love article explains,

“To be eligible for HARP 2.0 assistance, you must be up-to-date on your payments. In addition, the following criteria apply:

  •     You loan must be backed by Fannie Mae or Freddie Mac.
  •     Your mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  •     This must be your first time taking advantage of HARP. The only exception is if you had a Fannie Mae loan refinanced under early versions of HARP, between March and May 2009.
  •     Your current loan-to-value (LTV) ratio must be greater than 80 percent.
  •     You must work with a lender that is approved by Fannie Mae or Freddie Mac, and that participates in HARP.”

For more information on the proposed update to the HARP program, please click here to read the full guide at LoanLove.com.

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Kevin Blue
Loan Love
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