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Agencies announce improvements to HARP program

The HARP program enhancements were developed at FHFA’s direction with input from mortgage lenders, mortgage insurers and others.

Many homeowners will be eligible to refinance under HARP and building on the industry’s experience with HARP over the last two years, several changes have been identified that will make the program accessible to more borrowers with mortgages owned or guaranteed by Fannie Mae and Freddie Mac. The changes are aimed at creating greater refinancing opportunities for as many borrowers as possible, while reducing the risk to the Enterprises.

The announced program enhancements address key aspects of HARP that include:

  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;
  • Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;
  • Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;
  • Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and
  • Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

The revised current plan calls for guidelines with operational details about the HARP changes to be issued to mortgage lenders and servicers by Nov. 15, 2011. Industry participation in HARP is not mandatory so implementation schedules will vary as individual mortgage lenders, mortgage insurers, and other market participants modify their current internal processes.

Borrower Eligibility
In general, borrowers must meet the following criteria to participate in the HARP program:

  • The existing mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Homeowners can determine if they have a Fannie Mae loan by clicking here or calling 800-7FANNIE (8 a.m. to 8 p.m. EST). Homeowners can find out if they have a Freddie Mac loan by clicking here or calling 800-FREDDIE (8 a.m. to 8 p.m. EST);
  • The program will continue to be available for loans with LTVs above 80 percent;
  • Borrowers must be current on their mortgage payments with no late payments in the past six months and no more than one late payment in the past 12 months;
  • Borrowers should contact their existing lender or any other mortgage lender offering HARP refinances.

A link to the full Federal Housing Finance Agency announcement is available by clicking here.

For more information on HARP or other compliance questions, contact LSCU Director, Compliance Scott Morris at 866.231.0545, ext. 2165.

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