It seems like a relatively small thing, but it would appear that everyone is talking about recent adjustments to the HARP & HAFA programs, and I mean everyone. The subject has caught on with the American public and they’re not letting it go! An obvious explanation would be concern over hundreds of thousands of upsidedown mortgages and their residual effect on almost everyone else’s home values. But I think it goes much deeper than that.
For those of you who have been living in a cave for the past 2 ½ years, HARP AND HAFA, are part of the current administration’s Making Home Affordable program, which was implemented in February of 2009. The premise is to provide homeowners with alternatives to foreclosure through refinance, short sale or deed-in-lieu. Until now this program has received less than stellar reviews. But the most recent updates will possibly (possibly being the operative word) give this program the jump-start it has lacked so far.
NOTE: contrary to popular opinion the enhancements to HARP and HAFA have not taken effect yet. In fact they have not even been finalized and are not scheduled to be for several weeks, with an implementation date months out.
The proposed modifications should help underwater homeowners refinance at today’s low rates by lifting the 125% loan-to-value restraint… this is HUGE! Proposed changes also void the requirement of a new appraisal in favor of automated estimates, and eliminate several risk-based fees.
Now here’s where I believe the overwhelming interest in these adjustments is coming from. For the very first time since 2009, “reality” is being addressed. Previous guidelines seemed to assume that the real estate and job markets were not going to get worse, and that the only homeowners needing assistance would be those who were already behind in their payments. At a time when virtually every economist predicted several years of negative growth in our economy, and more to the point in our real estate market, HARP materialized as nothing more than a symbolic gesture. Unfortunately the economists were right and the symbolism of HARP only infuriated us all.
Now here’s where I believe the overwhelming interest in these adjustments is coming from. For the very first time since 2009, “reality” is being addressed. Previous guidelines seemed to assume that the real estate and job markets were not going to get worse, and that the only homeowners needing assistance would be those who were already behind in their payments. At a time when virtually every economist predicted several years of negative growth in our economy, and more to the point in our real estate market, HARP materialized as nothing more than a symbolic gesture. Unfortunately the economists were right and the symbolism of HARP only infuriated us all.
I’m going to choose to be optimistic about these impending developments with HARP & HAFA. They’re far from revolutionary but definitely a step in the right direction.
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