Fed HARP program expanded, help more owners

The Federal Housing Finance Agency (FHFA), with Fannie Mae and Freddie Mac, announced a series of changes to the Home Affordable Refinance Program (HARP). FHFA hopes to help more borrowers benefit from a program that refinances home mortgages.
HARP is the only refinance program that enables borrowers who owe more than their home is worth to take advantage of low interest rates and other refinancing benefits. The program is offered to borrowers whose loans were sold to Fannie Mae and Freddie Mac on or before May 31, 2009, with current loan-to-value (LTV) ratios above 80 percent.
New program enhancements change several aspects of HARP including:
• 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 for lenders that make loans backed by Fannie Mae and Freddie Mac.
• Eliminating a new property appraisal if there is a reliable AVM (automated valuation model) estimate provided by Fannie Mae or Freddie Mac.
• Extending the end date for HARP until Dec. 31, 2013, for loans originally sold on or before May 31, 2009.
Mortgage lenders should have more information about the HARP program changes by Nov. 15, 2011. Since participation isn’t mandatory, implementation schedules will vary.
The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $5.7 trillion in funding for the U.S. mortgage markets and financial institutions.

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