Now that the government has revamped their Home Affordable Refinance Program to expand its reach to more homeowners, lenders are being encouraged to offer more flexibility in lending. Until now, many lenders have been stubborn about their refinancing offers and many haven’t been willing to participate in programs like HARP. However, one of the lending leaders, Freddie Mac, is reporting that they will more closely follow the HARP 2.0 model.
Opening Up Doors
The news that Freddie Mac will be easing their mortgage underwriting formulas to increase the number of homeowners who qualify for refinancing offers came as much surprise. Once highly criticized for their practices and high applicant rejection rate, Freddie hasn’t always been on the good side of consumers. The changes made to HARP last year leading to the new 2.0 version of the program brought much attention to the inflexibility of lenders like Freddie, pushing government officials into developing ways to encourage lenders.
The HARP 2.0 program was designed to make it easier for homeowners to refinance their mortgages before foreclosure or mortgage debt strikes, a move that is now possible for many who were previously denied in the past due to less than perfect credit. With so many homeowners carrying Freddie-backed loans, more should be able to take advantage of the HARP 2.0 program without further problems.