Make Harp 3.0 Happen

Advocating for The Expansion of the Home Affordable Refinance Program

Housing News

HARP Extended, New Streamlined FHFA Refinance Program Coming Next Year

Melvin Watt, the director of the Federal Housing Finance Agency, announced that Fannie Mae and Freddie Mac will be launching a new streamlined refinance loan plan in October of 2017 that is aimed at borrowers with little or no home equity. The final details of the plan have not been released, but it sounds very much like the existing Home Affordable Refinance Program (HARP). It was also announced that HARP has once again been extended. The new expiration date is September 30, 2017. The extension allows the FHFA to continue to offer a loan refinancing option for borrowers that are equity challenged until the new streamlined refinance program goes live. The goal of the new program is sustainability, which is something that HARP lacked. The new program will have no cutoff date and will not limit borrowers to a single use. However, the program will still only service loans held by Fannie Mae and Freddie Mac. Underwater homeowners with non-GSE held loans are still lacking an alternative to refinance out of their high interest loans.


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FHFA Extends HARP Through 2016

On May 8th FHFA Director Mel Watt announced that the Home Affordable Refinance Program has been extended another year. HARP is now set to expire December 31, 2016. The eligibility requirements to participate in HARP have not changed. The extension only allows more time for those that can qualify for HARP to take advantage of the program. The FHFA estimates that more than 700,000 home owners nationwide are eligible for the program and would benefit by refinancing under HARP. It also means the program will remain relevant during President Obama’s final year in office. Despite the obvious advantages of HARP, the program has slowed to a trickle. In February Fannie Mae and Freddie Mac recorded just 10,673 HARP refinances. That is down from from 26,964 in February of 2014.

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The Housing Recovery is Stalling, Yet No Harp 3.0

For more than 3 years legislators hid behind a “housing recovery” as one of the factors for not supporting HARP 3.0. It didn’t matter that the recovery was never as strong as it was being made out to be. The people that most needed HARP expanded were a very long way from the housing recovery making a positive impact on their financial situation. A full recovery was always 10 years in the future. Well, now it appears better days for underwater homeowners may be farther away than we imagined. The housing recovery is stalling. The Wall Street Journal is reporting that 21 of the top 50 markets saw negative equity rise during Q4 of 2014. This does not sound like a recovery:

In 21 of the 50 biggest U.S. housing markets, the number of borrowers who owe more on their homes than the homes are worth increased during the fourth quarter, according to a report to be released Friday by Zillow Group Inc., a real-estate information company.

Nationwide, the picture got better, but only marginally so. About 16.9% of all mortgaged homes were underwater in the fourth quarter, down 0.1 percentage point from the third quarter. Zillow said the normal share of underwater borrowers is generally thought to be around 5%.

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Actually, it sounds like the complete opposite. A hopeful person might think this would scare Congress into taking some action before this soft “Housing Recovery” completely reverses direction. A good place for Congress to start would be passing HARP 3.0. But I’m not a very hopeful person.


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No News is Bad News for HARP 3.0

We passed a very depressing milestone on July 25th. That marked one year since Congress last considered legislation that would expand the Home Affordable Refinance Program. S.1373 – Rebuilding American Homeownership Act of 2013 (and all other HARP 3.0 related bills) have been sitting idle in the Banking, Housing, and Urban Affairs Committee for an entire year. Congress is completely unwilling to move HARP 3.0 forward, and FHFA Director Mel Watt is making no efforts to assist either. Mr. Watt is steadfastly refusing to make any changes to the program without the approval of Congress, even changes he is empowered to make. The current outlook for HARP 3.0 is bleak. It appears the Home Affordable Refinance Program is going to wind down until its date of December 31, 2015 with no more changes coming. There really isn’t much we can do at this point other that vote out all these scoundrels in the mid-term elections coming this fall.


The only new piece of HARP information I have to pass on is that the FHFA HARP outreach program is continuing on. The second in a series of townhall style meetings intended to reach homeowners still eligible for the program has been scheduled for Thursday, August 14 at 11 AM in Atlanta. If you live in Atlanta and would like to attend here is the address:

Ebenezer Baptist Church, Martin Luther King, Sr.
Community Resource Complex, Assembly Hall
101 Jackson Street, NE Atlanta, GA 30312

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I would assume most people that read this blog know their HARP eligibility, but if you are uncertain please click one of the sponsor links/banners on this website for more information.

No Help From Mel Watt For HARP 3.0

Yesterday Mel Watt spoke at the Brookings Institution on the future of Fannie Mae and Freddie Mac. It was his first public speech since taking over as Director of the FHFA. The news was not good for those of us who have been fighting for the Home Affordable Refinance Program to be expanded. Mr. Watt signaled that the FHFA will make no effort to advance HARP 3.0. The FHFA will continue to operate HARP under the current guidelines, eligibility dates, and regulations. Here is was Mel Watt’s remarks concerning the HARP program:

We have also received a number of inquiries about changing the eligibility requirements for the Home Affordable Refinance Program (HARP). Because the number of borrowers we could add by extending the eligibility date or by changing performance requirements is relatively small, we have decided not to alter HARP eligibility parameters. FHFA is, however, working to retarget our HARP outreach efforts to the approximately 750,000 borrowers who already qualify and would financially benefit from refinancing.

We were led to believe that a change in leadership at the FHFA would help HARP 3.0. More lies and broken promises. Mel Watt is no better than Ed DeMarco.

Housing Recovery Perceptions Are Hindering HARP 3.0

HARP 3.0 Count Up Clock:

Failure of The Obama Administration, Congress, The FHFA, and Other Policy Makers To Implement HARP 3.0 Has Now Reached 2034 days 4 hours 44 minutes 10 seconds

Please click here to sign the HARP 3.0 Count Up Clock Petition
 

Since launching The HARP 3.0 Count Up Clock Petition two weeks ago it has become painfully evident to me that the perceptions of this sham housing recovery are greatly hampering the efforts of underwater homeowners that are pushing to expand the Home Affordable Refinance Program. The perception held by policy makers, the media, and much of the public is that the housing recovery has resolved the issue of negative equity home ownership. It simply isn’t true. Millions of people are still underwater on their mortgages. And what is really scary is that housing recovery is way softer than most people realize. This sham housing “recovery” has been greatly fueled by investors making all cash purchases and sales of distressed homes. We are a long long way from a true housing recovery. But the cries of assistance have fallen on deaf ears. I spared no expense in blasting a press release to announce the HARP 3.0 Count Up Clock Petition. I followed up that media blitz with hundreds of emails to individual members of the media. The result: two small articles and a couple of email responses from journalists that have promised to check it out. It is actually quite amazing the number of signatures we have managed to garner with virtually no exposure from the media.

 
What really burns me up is that yesterday the FHFA issued a release that the HARP program has officially passed the 3 million loan mark. The media jumped on this news as an opportunity to declare the HARP program as a great success. This would have been a perfect chance for news organizations to also mention how many people have not been helped by HARP, and how many underwater homeowners could benefit from HARP 3.0. Much like our policy makers, the media has dropped the ball on this under reported story. Even worse is that the HARP program is touted for being a much greater success than it truly is. At the height of the housing crisis more than 15 million homeowners were underwater. Several million other homeowners had so little equity that refinance opportunities outside of HARP weren’t available. Less than 1 out of every 5 homeowners that the HARP program was designed to help have been able to refinance under HARP. 20% is a pretty crummy success rate if you ask me.
 

Here is the list of media coverage the HARP 3.0 Count Up Clock Petition has received thus far:
HousingWire.com: Find out who wants to force HARP 3.0
 
MyMortgageInsider.com: HARP 3: Experts Weigh In on When New HARP Program will Happen
 

Treasury Adviser Wants HARP 3.0 for Non-GSEs, But Opposes Extending Cutoff Date

Michael Stegman of the U.S. Treasury, and a trusted housing adviser to the Obama Administration, delivered a speech at an industry conference this week in which he reiterated his support for expanding HARP for non-Fannie and non-Freddie loans.

“We must not forget about the inability of performing underwater borrowers whose loans are held in private label security trusts to access refinancing”

-Michael Stegman, U.S. Treasury Housing Adviser

Stegman has been a proponent of a HARP-like program for Non-GSEs since he joined the Treasury. He has pleaded with Congress to pass a solution and has spoken in support of the “Merkley Mortgage”. Last year he suggested the Treasury would consider a Plan B implementation without Congressional approval. In his speech this week he backed off of those remarks.

 
However, not all underwater homeowners should consider Michael Stegman an ally. Stegman stated he opposes changing the May 31, 2009 HARP eligibility cutoff date. In fact, he completely downplayed the importance of the date.

“Very few homeowners whose loans were originated after the cut-off date are underwater”, said Stegman.

I’m not sure where Mr. Stegman gets his data, but I beg to differ. If he read some of the comments left by people on makeharp3happen.com he might change his mind.
 

This is what is so incredibly frustrating about HARP and HARP 3.0 proposals. Bureaucrats keep piecemealing solutions. It is time to stop cherry picking winners and losers. Underwater homeowners deserve a comprehensive home refinance solution that leaves no one behind.
 

HARP 3.0 News, Links, and Notes

  • Barry Ritholtz wrote an opinion piece on Bloomberg.com calling HARP The Best Housing Program You’ve Never Heard Of. I’m sure those of you reading this website would beg to to differ. We know all about HARP. We know its flaws and we know its potential. Sadly, Barry is correct. HARP has helped nearly 3 million homeowners to date. It is hard to find a housing initiative run by the government that helped so many people. Unfortunately, HARP has still fallen woefully short of what it could and should be. There are still more than 9.25 million homeowners considered significantly underwater, plus another 3 or 4 million that are slightly underwater. There are another 4 million or so homeowners with so little equity in their home that HARP would be the only viable refinance option if they could qualify. When the housing market bottomed out in 2012 there were 15 million homeowners significantly underwater. When you break it all down, HARP has helped less than 20% of the people that have needed it. You know what happens to a baseball player with a batting average less that .200? They get sent to the minor leagues to work on their game. It is time for HARP to get sent down to the minors to work on its swing so it can bat a little better.


  • The Government has rolled out a new website to raise awareness and provide information for HARP. The website is HARP.gov. So we have a new HARP website just rolled out and the State of Union Address coming up in two weeks. It seems very likely the Home Affordable Refinance Program is going to be one of President Obama’s main talking points that night. This is all good news, but we know talk is cheap. We don’t need a new government website for HARP. We need a new HARP program. We need HARP 3.0.

  • Look for a new feature that will be coming soon to makeharp3happen.com. I’ll be profiling underwater homeowners that need HARP 3.0, and are also small business owners. I’m urging everyone support each other by patronizing businesses of HARP 3.0 supporters.

  • Senate Confirms Mel Watt Nomination for Director of the FHFA

    Ed DeMarco is out as Director of the Federal Housing Finance Agency and Mel Watt is in. Finally, after 4 years under Acting Director Ed DeMarco, a permanent director is in place to lead the agency that regulates Fannie Mae and Freddie Mac. Senate Democrats took advantage of revised rules that virtually eliminates filibustering of nominations to push the Watt nomination thru by a vote of 57-41. As head of the FHFA Mel Watt will have significant power to alter the Home Affordable Refinance Program. It is unclear exactly how long the transition of leadership will take. The expectations are that Mel Watt will move quickly once he assumes leadership. Ed DeMarco repeatedly refused to comply with President Obama’s requests to ease the burdens on Underwater Homeowners. Mel Watt was hand picked by the President to do what DeMarco wouldn’t. The light is now on at the end of this tunnel we have been referring to as HARP 3.0.

    HARP 3.0 Update: The Real Truth

    I do a lot of searching online for information on the HARP program, HARP 3.0, and Underwater Homeowners. It saddens me the lack of true information people get. A Google search for “HARP 3.0″ yields 694,000 results. The vast majority are links to sites backed by mortgage industry professionals that declare that HARP 3.0 is coming. The information they are providing is either stale or highly speculative. These sites are more concerned about selling you on their services than they are about providing quality information. If you want the real scoop you need to come to MakeHarp3Happen.com. So without further ado, here is the real truth on the status of HARP 3. There has been no significant headway made this entire year toward rolling out a new version of HARP. Here is a recap of the status of HARP 3.0:

    • Two pieces of HARP legislation were introduced this year. H.R. 736 and S. 249, both dubbed The Responsible Homeowner Refinancing Act of 2013, were introduced in their respective chambers of Congress back in February. Neither have made it past committee. This legislation has been idle for more than 8 months, and given the gridlock within this Congress there is little likelihood that they will be passed.
    • President Obama nominated Representative Mel Watt to take over as Director of the FHFA in Late April. Mr. Watt is much more open to making changes to the HARP program that would benefit Underwater Homeowners than acting director Ed DeMarco. Watt was seen as a long shot of being confirmed due to Republican opposition. Republicans hold enough votes in the Senate to block the nomination. The Senate dragged their feet most of the Summer before finally Senate Majority Leader Harry Reid pushed for a cloture vote on October 31st. Cloture was denied by a vote of 56-42 meaning more of the status quo from the FHFA.

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