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Get Ready for the HARP 3.0 Refinance Program

By E Singer
Dec 11th, 2013

harp 3 programsThe passage of HARP 3.0 becomes more likely as top budget negotiators in Washington embrace bipartisanship in funding the federal government.

Mortgage banks and homeowners should take comfort knowing that it may soon become much easier to refinance a home loan. Or at least this is the promise that a renewed spirit of bipartisanship has brought to the nation’s capital.


Why HARP 3.0 is More Likely to Pass

HARP 3.0 is like any other bill in how it must be passed. It needs to be voted out of committee, passed by both the House and Senate and then signed by the president. This process has become notoriously difficult over the last several years.

In fact, the last congressional session acquired the noteworthy distinction of being the most unproductive since the 1940′s. But this period of partisan infighting and continuous gridlock may soon be over.

For the first time since 2011, there appears to be a deal in the works which would fund the federal government for the next two years. Representative Paul Ryan and Senate Patty Murray have put forward a budget proposal that is gaining noteworthy support from both political parties in office. A source familiar with the situation reports that Paul Ryan hasn’t been this happy since a film adaptation of Atlas Shrugged was announced.

This is a clear break from the partisan rancor that nearly brought the federal government to the verge of collapse just a few months ago. If passed the budget proposal would undo about $63 trillion dollars worth of budget cuts that were scheduled to go into effect due to the sequestration.

What HARP Accomplishes

The Home Affordable Refinancing Program (HARP) 3.0 was introduced to congress on February 7th 2013. If passed HARP would eliminate many closing costs, reduce upfront fees and make it easier for homeowners to change loan servicers. It promises to finally open the doors to the millions of Americans who have been looking to refinance but who have been unable to thus far.

A number of prominent real estate groups have voiced their support for HARP 3.0. These include the Mortgage Bankers Association (MBA), the National Association of Home Builders (NAHB), NAMB—The Association of Mortgage Professionals, the National Association of Realtors (NAR), the National Association of Real Estate Brokers, and the Center for Responsible Lending (CRL).

Back in September the Federal Housing Agency (FHA) launched a campaign designed to increase homeowners’ knowledge about HARP. According to an FHA press release:

“The campaign is designed to encourage homeowners who have been making their mortgage payments, but who owe more than their home is worth, to contact their current lender or any other mortgage lender offering HARP refinances to review their refinancing options.”

What distinguishes HARP 3.0 from previous iterations of HARP is the scope of people who will finally be allowed to refinance. For the first time since the program was announced, homeowners whose loans are not guaranteed by Fannie Mae and Freddie Mac will be able to refinance.

But keep in mind that this proposal will only go into effect if HARP 3.0 is able to pass. So for the time being, homeowners will still need to have their loans guaranteed by Fannie and Freddie to qualify for refinancing.