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.
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.
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)