Inside HARP 2.0

The Home Affordable Refinance Program (HARP) is part of the government’s Making Home Affordable Program. After its original release last year, the program failed to deliver the magnitude of help promised for at-risk homeowners. It has since been revamped to expand its reach and help more homeowners avoid foreclosure and resolve mortgage debts.

What’s New?

There are several important changes to the program that are designed to include more benefits and expand its consumer base.

• The 125% loan-to-value limit cap has been lifted. Under the previous program, balances owed on a mortgage over 25% of the value of the home would not qualify for refinancing. Now, there is no limit to the loan-to-value ratio that qualifies for assistance under HARP.
• The fees for loan-level pricing adjustments have been eliminated under the program. The up-front costs of 2% of the loan value required on most refinancing offers has also been waived, saving homeowners a considerable amount of money. The new program also caps fees on 30-year mortgages at 0.75% of the loan value.
• The new program rules also allow for an automatic appraisal for the value of the home rather than an actual appraisal, saving applicants money by avoiding the costs of an actual appraisal. The income verification requirement has been lifted, opening the door for more applicants to qualify for  refinanced  mortgage offers.