If you happened to catch last night’s State of the Union speech, you may have noticed (between the incessant clapping) President Obama’s mention of a bill that would give American homeowners the chance to save $3,000 annually by refinancing their mortgages.
While it was his only mention of “mortgage” on the night, at least it was a call to action.
He asked the audience why anyone would be against such a bill, and why it would be a “partisan issue,” adding that both Republicans and Democrats have supported it.
So what bill was he referring to? While he didn’t explicitly mention it by name, we know it’s “The Responsible Homeowner Refinancing Act of 2013 (S. 249),” which was re-introduced last week by Senators Barbara Boxer (D-CA) and Robert Menendez (D-NJ).
Apart from it being obvious, Boxer herself confirmed it, after she praised Obama’s support of the bill in a subsequent press release.
The previous name of the bill was, “The Responsible Homeowner Refinancing Act of 2012.”
Many refer to the bill as “HARP 3,” though others refer to HARP 3 as the refinance program for non-Fannie and Freddie mortgages, so I don’t really know what to think at this point.
New Name, New Details
While it sounds like the same bill all over again, there are actually some important distinctions.
Here is what’s included in the latest bill:
– Remove barriers to competition so borrowers can get a HARP refinance with any lender (same)
– Guarantee equal access to streamline refinance, regardless of LTV (same)
– Reduce up-front fees on refinances (different, used to be “eliminate up-front fees completely”)
– Eliminate appraisal costs for all borrowers (same)
– Eliminate employment and income verification requirements (same)
– Extend HARP through 2014 (set to expire December 31, 2013)
As you can see, much is the same, aside from the up-front fees and the date of the HARP extension.
What Else Is Different?
The old bill also had a few more items that weren’t included this time around, perhaps because the measures faced too much resistance.
The 2012 version attempted to levy fines on both second mortgage holders and mortgage insurers who hindered refinancing via HARP.
Clearly that didn’t sit well, so both ideas were axed from the 2013 bill.
Additionally, and this is a biggie, the 2012 bill had a measure that would push the eligibility date for HARP forward one year to May 31, 2010.
In other words, those who took out mortgages as recently as mid-2010 would be eligible for a HARP refinance.
But all of that has been stripped from the most recent bill in the hopes of a successful passage.
The last bit was actually a reasonable idea, seeing that home values continued to drop as recently as the past couple years. There are plenty of recent buyers who are now underwater on their mortgages.
This led one man to create a White House petition to eliminate the HARP cut-off date entirely and allow for so-called “reHARPing.”
But it failed to receive the 25,000 signatures necessary for the White House to “take a look.”
Oddly enough, that too was referred to as “HARP 3.” I guess everything at this point is known as HARP 3, seeing that we already have HARP 1 and HARP 2 in action.
So what are the odds of this bill landing on Obama’s desk? Well, because it’s so late in the game, the passage of The Responsible Homeowner Refinancing Act of 2013 is also unlikely at best.
Again, most who needed assistance probably already refinanced or are currently doing so via HARP 2, so convincing Republicans and Democrats will be a tough haul, especially seeing that more pressing issues seem to be at hand.
I don’t agree that it’s too late to enact a bill like this. There are still so many people that don’t have a Fannie Mae or Freddie Mac backed loan and have been RESPONSIBLE and kept up on their payments and have good credit. Why should we ignore these people because “most who needed assistance probably already refinanced or are currently doing so via HARP 2”. Why exclude anyone?? As the President said -“He asked the audience why anyone would be against such a bill, and why it would be a “partisan issue,” adding that both Republicans and Democrats have supported it”. So why would you make a statement about it not moving forward. Short sighted thinking at best on your part. IF you have a large enough audience with your blog maybe you could help “push” it along. Why not try to do some good with your blog?
This bill has nothing to do with loans NOT backed by Fannie or Freddie. I’ve been advocating a refinance plan for private label mortgages for years now, and have written numerous posts regarding it. Additionally, I wrote about the recent petition to extend and expand HARP 2, and encouraged those who backed it to sign it. I didn’t say I want this bill to fail, I just expressed my opinion on the likelihood of it becoming law.
i agree with gary.I’ve been keeping up with talks about “harp 3.0,” and it was supposed to include mortgages not backed by fannie or freddie. always a run around. i feel that there are many out there like myself with great credit, havn’t missed a mortgage in 6 or 7 years, and can’t refinance. its funny how u get rewarded for not making payments on time(no matter what the hardship), yet people like myself(who also have hardships) find a way to always pay the note.