Last year we all believed the truth that the government’s Home Affordable Refinance Program (HARP) would conclude in September. However, the Federal Housing Finance Agency extended the ending date for HARP through Dec. 31, 2018. At that time, last fall, to tell the truth, the end of 2018 seemed a long time away.
The Truth about the Countdown: The Calendar Really is Clicking Down, this Time
Guess what? If you are planning to re-finance your home soon, that final HARP date is no longer such a long time away. And that might be why quite a few lenders have been sending out saturation campaigns. Email boxes are full of emails about the program as it nears its demise. Back in 2017, The Federal Housing Finance Agency announced it was adding an additional 15 months onto the program’s already extended lifespan. But that ending is fast approaching.
Truth in Lending: A Little HARP History–Chapter One, the Early Years
Let’s take a quick look at the history of this government re-fi program. It was born in 2009, and in brief:
- HARP has allowed borrowers to refinance with little or no equity into more affordable mortgages.
- They need not purchase more mortgage insurance.
- The borrowers qualify by having a loan-to-value (LTV) ratio equal to or greater than 80 percent.
- Likewise the borrowers must have limited delinquencies over the 12 months prior to refinancing. If you are researching a re-fi at this time, you might notice e-mails from lenders are currently targeting borrowers who have consistently paid their mortgage payments on time for at least six to twelve months.
Tracing the Truth: Extensions for HARP and HAMP–Chapter Two, the Self-Perpetuating Program Marches On
- It was June 2014, when the Department of the Treasury Secretary Jacob Lew created “a series of initiatives designed to spur the flailing housing market, including the extension of the Home Affordable Modification Program (HAMP) until Dec. 31, 2016.”
- Then, in May 2015, the FHFA moved the HARP deadline to the end of 2016 as well. This matched the deadline of HAMP.
Truth in the Final Phases: The Big Recent Updates and HARP Hype
“But just about one year ago, the FHFA again announced that that it was delaying the end of HARP, this time until Sept. 30, 2017.
- At the time, the FHFA reported the reason for extending the crisis-era refinance program was to “create a bridge” to a new, streamlined refinance product, coming soon, in October 2017.
- Like HARP, they stated, it will be aimed at borrowers with high loan-to-value ratios when it is released.
- However, the government is still modifying that program. So they extended the HARP deadline through all of this year, 2018.
Let’s see, August, September, October, November, December, just five months until the program expires. And, as we stated above, many lenders are currently building the suspense by reminding homeowners of the benefits of this mortgage program. Just check your email or your mailbox and you might see one of these reminders. And, as we stated above, the email campaigns of many companies are evidence that the deadline is real, this time. Maybe. Probably.
Truth in Numbers: News About HARP Eligibility
Recently, the FHFA also announced an eligibility date that opens the refinance program for loans that originated on or after Oct. 1, 2017. The FHFA said that choosing that eligibility date was “necessary to preserve the objectives of the Enterprises’ credit risk transfer program under which the Enterprises have transferred a portion of risk on $1.6 trillion of unpaid principal balance with a combined risk in force of nearly $54.2 billion as of March 2017.”
Today’s Truth: A Few Thoughtful Terrific Take-Aways
We have seen that in its life-time, HARP has netted over 3.4 million homeowners. Yes, with the end of the program in sight, we also see thousands of homeowners scrambling to accomplish paperwork and get approved with HARP before the program ends December 31, 2018. “Congress has made it clear that it has no plans to extend it so this is your last chance to use this once in a lifetime mortgage relief program.”
However, here at Palm State Mortgage Company, we issue a few words of caution. Do not get carried away by all the HARP hype at the current time. Why?
We tell you this simply because HARP might not necessarily be the best choice for your unique re-fi situation. That is why we shop around with trusted lenders and explore all your financial options.
We’ll be bringing you more news about this fading program in future blogs. You will learn why it pays to have professional help when you are seeking a lender for a re-financing situations.