I’ve written about the Home Affordable Refinance Program (HARP) on this blog many, many times.
Most of the posts have focused on possible extensions and expansions for the popular program, which like any other assistance program has a number of restrictions.
Perhaps the most significant one is that only those with loans sold to Fannie Mae and Freddie Mac are eligible to take part.
As a result, those with private-label mortgages are out of luck, or at least have to turn to their own loan servicers for possible assistance.
Another major roadblock is the HARP cutoff date, which is currently set firmly on May 31, 2009, despite many pleas to push it out another year.
Those have thus far fallen on deaf ears, ostensibly because borrowers who purchased homes or refinanced after the mortgage crisis aren’t the targets of relief efforts, whether “fair” or not.
New HARP Cutoff Date, Kind Of
Anyway, the hitch with the current cutoff date is that it isn’t based on when the loan actually closed, but rather when Fannie Mae or Freddie Mac acquired the original loan.
So borrowers may have closed their loan on May 30th, 2009, but their loan didn’t make its way over to one of the government-sponsored enterprises (GSEs) until after that crucial cutoff date.
This time lag, which could vary from a few days to a few weeks or longer, could have unintentionally shut out a lot of borrowers. It’s unclear how many, but it could be material.
And so Fannie and Freddie are revising their policies to use the note date of the mortgage as opposed to the securitization date.
Freddie Mac said it would make the change effective October 27, 2013 in order to make its “eligibility requirements more transparent to borrowers.”
By more transparent, they mean you probably know when your loan closed, but have no idea if and when it was sold off to Freddie Mac.
In accordance with this change, the Freddie Mac Loan Look-Up Tool will be updated by October 27.
Over at Fannie Mae, it’s a similar story, though there are a few unique details to take note of.
Come November 16, when they make their other major underwriting changes, including the new minimum 5% down payment, the May 31, 2009 eligibility date for the Refi Plus will be based on the note date of the original loan.
Again, they are opting for the note date in a bid to be more transparent. And they’re encouraging lenders to resubmit loans that might be eligible based on the rule change.
So it’s not HARP 3 by any means, or HARP 2.5, but it is a slightly better HARP, no? That’s why I’m referring to it as HARP 2.1.
It’s a little boost that comes at exactly the right time, seeing that long-term fixed mortgage rates are inching back toward the 3% range again, something many thought wouldn’t happen again.
If you think you might be on the cusp, speak to a lender soon to see if you’re eligible based on the new guidelines.
(photo: Robert & Pat Rogers)
Anybody else had this problem?:
When I looked up my loan on Fannie Mae a couple of days ago, I learned that they purchased our loan on 07/01/2004.
We closed on that loan 07/20/2004, 19 days later!
The “lender” was AMERICA’S WHOLESALE LENDER, but I know that it was actually Countrywide Home Loans who was sending faxes to us during negotiations back then, I’ve spent the last two weeks trying to figure out what all those loan papers actually mean, so that’s why I looked up our loan on Fannie Mae.
I don’t consider myself “stupid,” but feel stupid in that I find it hard to understand all the ins and outs of our mortgage after spending so much time trying to account for it. Certainly had no idea what I was signing when at the closing table.
Bill,
The HARP cutoff date is May 31, 2009, so either way you wouldn’t have an issue with eligibility based on those 2004 dates, as long as Fannie Mae actually acquired the loan.
This helped me. We signed in march 2009, but our loan was transferred July 1 2009. Im glad to have a chance now.
Awesome Chris, especially with rates so low again! I figured some people out there would benefit enormously from this rather quiet rule change. Hopefully the word gets out to others in need.
Hey, it’s a step in the right direction. Hopefully Mel Watt brings about HARP 3!
HARP 3 can help a lot of us !!!
It could, be it doesn’t appear to be coming, ever, unfortunately.
It sucks in my case as I applied for the HARP in Jan 2010. Like many others was told I was not approved, although I met all criteria including loan originating in 2006).My sister was denied 3 times before they approved her. I didnt know she would be approved eventually and time was running out .I felt I would lose the house but was only 1 month behind. So I took all our money from 401k to pay down mortgage to refi in June 2010. But the refi was not fixed and only a bandaid. I claimed bankruptcy a year later. I am 54 years old with 2 jobs and no retirement and barely able to make the $2400/mo payment. Although Im not under water Ive paid over $150,000 on this house and only have $10,000 in equity. What a waste.