Details on HARP2.0 Expected Tuesday

If they hold to their original schedule, the Federal Housing Finance Agency (FHFA) along with Freddie Mac and Fannie Mae, the two government sponsored enterprises (GSEs) which it holds in conservatorship, will be releasing guidance on the new version of HARP on Tuesday.  On October 24 President Obama announced expansion of HARP, the Home Affordable Refinance Program in hopes it might reach a larger audience.

HARP was designed to help borrowers who are current on their existing mortgage but underwater due to the diminished value of their homes to finance into a loan with a lower interest rate.  Under HARP as it was originally designed, refinancing was available to borrowers with GSE owned or guaranteed loans up to a 125 percent loan-to-value (LTV) ratio.  Under HARP 2.0 as they revised program is called, the upper limit on LTV is removed (although this is only a consideration for borrowers who seek to refinance with the lender who currently holds their mortgage), risk-based fees paid by borrowers will be reduced or eliminated and lenders will be excused from some of the representations and warranties typically required with GSE loans.  In addition, where a suitable automatic valuation model (AVM) is available no appraisal will be required and the program has been extended until December 31, 2013.

At the time of the original HARP2.0 announcement FHFA said that operational details about the HARP changes would be issued to lenders and servicers by the GSEs by November 15 and,"Since industry participation in HARP is not mandatory, implementation schedules will vary as individual lenders, mortgage insurers and other market participants modify their processes."