There is hope for those homeowners whose homes’ values have considerably dropped underwater with the growing number of HARP refinance lenders supporting the government’s federal loan modification program. The HARP refinancing program which was put in place in 2009 has been helping homeowners who are starting to have problems with their mortgages refinance their loans for lower interest rates and repayment amounts. Today, the HARP refinancing program continues to extend the same benefits allowing homeowners to sustain payments on their mortgages and to prevent falling into default. With the expansion of the coverage and the easing of application requirements of the HARP refinancing program, more borrowers are now eligible to avail of this government refinancing assistance. Likewise, the new expanded provisions have increased the number of lenders who are willing to get into the program, giving borrowers more options to refinance.
HARP refinance lenders are particularly made more open to the HARP refinancing program with the new provision that puts a limit to their liability as far as loan defaults are concerned. A new provision is included in the expanded HARP refinancing program wherein lenders will not be forced by Fannie Mae and Freddie Mac to buy back any refinance loan that is considered non-performing. Financial institutions that were previously reluctant to support the HARP refinancing program are now willing to add the HARP refinancing program to their roster of loan offerings and to take on the risk of giving mortgage money to homeowners of underwater properties. Borrowers should note, though, that this new provision applies only to those mortgages refinanced using the HARP refinancing program’s automated loan underwriting and approval software. Refinanced mortgages processed using the HARP refinancing program’s manual underwriting and approval procedures.
Another revision to the HARP refinancing program’s guidelines that is beneficial to HARP refinance lenders is the reduction in the fees and charges levied by the federal government on these transactions. Before the program revisions, Fannie Mae and Freddie Mac charged higher fees for granting loans to borrowers with high loan-to-value ratios. The reduction in the high loan-to-value ratio loans now makes it possible for the lenders to offer cheaper loans that are more attractive to borrowers. This particular provision also translates to benefits for the borrowers since the lenders are also able to pass their savings on to the consumers. Borrowers applying under the HARP refinancing program with medium term loans ranging from 15 years to 20 years are able to take advantage of even lower fees from HARP refinance lenders.