Harp Refinance

[Terrel L. Shields]

I don't get it, Terell? There is NOTHING odd or different about a HARP refi appraisal.

There are homes that are too underwater to benefit from HARP. The pressure for you to reach that threshold can potentially be enormous. But on the other hand, there is also a minimum LTV of 80%. So you have to fit between one and the other. It is just a great place to get a complaint filed.

And of course, to get "HARPED" you have to have already been in Fannie mae or Freddy Mac. Right?

 

[Pittsburgh Pete]

Let's get it right, it is a TAXPAYER bailout in disguise. Too many people are using the term government when in fact it is the taxpayer who is bailing out whatever the cause-of-the-week is.

I had a discussion with a 10-year old about where food stamps and subsidized housing comes from. She said it was the government and I asked her where the government got the money from. She couldn't answer the question. I would guess that many 30 year-old people can't answer the question either.

Taxpayer = Government (we the people and all that).

Sorry you're exposed to folks that are as smart as 10 year olds.

 

[AJL118]

This is not a government bail-out. Perhaps you will change your thinking when you read about it:

http://www.freddiemac.com/avoidforeclosure/harp.html

We are halfway through a refinance with Freddie (via Quicken Loans) on our condo. We have never had a late or missed house payment. We acknowledge the outstanding balance and only want to reduce our interest rate. The current note rate is 6.75, and our locked rate is 4.25 which will reduce our interest payment by $4,000 a year. We have never been able to refinance before due to market value.

This basically is paying off a high interest loan which has no prepayment penalty and generating a new loan. There is no loan modification. This doesn't hurt Freddie and doesn't increase its exposure. Assuming it will go through, it will be a big help to us.

 

[Lobo Fan]

It is still a switch from a loan by your current lender to a loan backed by the government. I assume your are underwater on the value? This makes your loan at risk for default. Through HARP:, they are removing a high risk loan from the bank's books and putting on the government books. You are still underwater, just at a lower interest rate.

The first bank is off the hook.

 

[Mr Rex]

It is still a switch from a loan by your current lender to a loan backed by the government. I assume your are underwater on the value? This makes your loan at risk for default. Through HARP:, they are removing a high risk loan from the bank's books and putting on the government books. You are still underwater, just at a lower interest rate.

The first bank is off the hook.

HARP is for loans already with Fannie or Freddie.

 

[AJL118]

I should have been more clear. Our current note is held by Freddie.

 

[Terrel L. Shields]

It is still a switch from a loan by your current lender to a loan backed by the government.

Fred/Fan are already GSEs that were supposed to be "independent" thus never need to be "bailed out".

they are removing a high risk loan from the bank's books and putting on the government books. You are still underwater, just at a lower interest rate.

Thus, the loan was already at risk and was on the government books. HARPs purpose was to lower the interest rate so that people had a better chance of paying it back, thus might not simply walk. Walking, also costs us money....administering HARP costs us money....

So the taxpayer gets to pay for it anyway you slice it. It's ain't free.

 

[J Grant]

Why is the taxpayer paying? The homeowner is paying off the loan, just at a reduced interest rate.

 

[Terrel L. Shields]

Why is the taxpayer paying? The homeowner is paying off the loan, just at a reduced interest rate

Google it yourself. Do you think HARP is administered in a vacuum?

[url]http://www.huffingtonpost.com/2011/10/24/foreclosure-plan-obama-harp-refinancing_n_1028554.html[/URL]

Faced with the weak response to the Home Affordable Refinance Program, the Obama administration is planning to open up the program to all borrowers who owe more on their mortgage than their homes' worth, commonly dubbed being underwater, and have not missed a mortgage payment. HARP had been limited to borrowers who owed up to 25 percent more than their home is worth. More than 22 percent of all home mortgages -- or 10.9 million homes -- are currently underwater, according to CoreLogic data. Fewer than 900,000 borrowers have elected to go through HARP to date.

It was supposed to help 4 million.

AND

Under the modified plan, "put back" liability at banks will be erased for any underwater mortgage that is refinanced through HARP, eliminating Fannie and Freddie's ability to sack lenders with losses in the event that the mortgage does not pan out.

So go HARP and the clawback from banks disappears...so, fannie and freddy have to eat even more bad loans that they may well have forced the banks to take back.

FHFA administers HARP...at a price. We the people fund it. FHA and VA have similar programs but this is basically for Fannie and Freddy. So how many people are working at FHFA are busy with HARP? Is the homeowner paying for them? no. The taxpayer is.

To suggest any government program does not come at a cost is outright silly.

Ignore for the moment that FHA will cost the taxpayers $150 BILLION in losses.
[url]http://www.forbes.com/sites/richardfinger/2012/12/07/FHA-will-cost-taxpayers-150-billion/[/URL]

 

[AJL118]

Terrel - Freddie's exposure doesn't change. In fact, I believe its exposure is reduced. It reduces the possibility of the borrower taking a walk on the note. The misunderstanding must be about a mortgage modification. Our loan is not being modified! It is being paid off, and a new note and mortgage is being made at a lower rate. There are no out-of-pockets paid by Freddie - just the borrower.

Please don't commingle this refinance program with earlier HARP programs. Therein lie the government give-aways.