A question that we are asked a lot around the offices of The Home Loan Expert is “When will we see HARP 3.0?” Well, we have no idea, really. Let’s step back for a minute and explain what HARP is, and why people desperately want it to expand further. Travelling back to the year 2009, the Home Affordable Refinance Program, or HARP, was a hugely successful government program meant to help people who had… problematic loans with Fannie Mae and Freddie Mac refinance. It was designed to allow those who were underwater on their homes or had massive monthly payments that they couldn’t live with to refinance at a more palatable rate. The goal? Keep people in their homes. The foreclosure rate had skyrocketed after the housing bubble collapsed, and the federal government had a huge chip to use with their bailout of Freddie Mac and Fannie Mae.
The program was a huge hit, letting home owners refinance at record rates, and allowing families to stay in their homes at reduced rates. The program was so popular that it spawned HARP 2.0 in 2011. This time, it wasn’t just for the loans that had gotten past the point of being more than the home was worth, or had missed payments. This was a new program that allowed for those in good standing to refinance their homes at lower rates, and for up to 125% of the value of their home without having to get PMI, or Private Mortgage Insurance. They also added the provision that the mortgage lender wouldn’t be held liable for fraud on the original loan, which brought more lenders into the fold.
But what about HARP 3.0, people ask. HARP 3.0 is the Holy Grail for home owners. It’s the long-rumored addition to the plan, where lenders besides Fannie and Freddie would allow for the same provisions in HARP, opening up the program to millions of new homeowners. This would obviously be a boon to borrowers, as they would be able to get out from under their high interest loans and into a smaller interest rate, to lower payments, eliminate years on their loan, or just take cash out to do home improvements. However, there’s no guarantee that this will ever happen. The main problem is that the federal government doesn’t have a stake in any other loan companies, and can’t compel them to refinance loans. The United States government has been known to get their way in the past, though. We would never count out HARP 3.0 in the future. If it ever comes to pass, The Home Loan Expert will be all over it, making sure that our St. Louis area refinancers will have access to the lowest interest rates in the city.
To refinance today, or get a loan on a new home, call (314) 781-9700 and visit www.thehomeloanexpert.com/saint-louis to apply online today! We make it easy!