I still see a lot of chatter from hopeful people on social media and in the comment section of this blog about their need for HARP 3.0. I’m sorry to deliver this reality check, but it is just not going to happen. All progress on the initiative stalled last year. HARP 3.0 is a dead end. The Home Affordable Refinance Program in its current state is set to run out at the end of 2016. And that will be it. I’m sorry, but unfortunately we could not Make Harp 3.0 Happen. However, that doesn’t mean you should completely give in to your financial situation. Here are some tips I have for you instead of hopelessly waiting for a HARP lifeline from the government.
1) Build a cadre of real estate and finance professionals that you trust. Just because you feel trapped in a mortgage/housing situation now doesn’t necessarily mean you are or will be forever. There are always options… although those options often require hard painstaking decision making. You need people you can trust within the appropriate industries to help guide if/when you need to make such a decision. Find a good real estate agent, finance professional, tax professional, and real estate attorney that you can trust. There are good ones out there that aren’t slime balls trying to take advantage of you. You want to look for professionals that are in it with you for the long haul and not just trying to make a quick buck. If they are good to you now, can answer your questions honestly, and work with you to build good business relations they will get your money later. You shouldn’t abuse them or steal their time when you know you aren’t yet committed to taking any action, but you should feel comfortable to send a quick email or a phone call when you need some advice. Network with your friends and family to find professionals that they have had positive experiences with.
2) Pay close attention to current home value and property taxes. Many homes that are underwater are being assessed for market values are that are no longer accurate. If your home is over assessed you are paying too much. You have the right to appeal the property value assessment assigned by your local municipality. Many parts of the country are seeing appeal success rates of 75%. I personally shaved $1100 per year off my taxes by appealing. You can go the do it yourself route, or work with lawyer that specializes in property tax appeals. Most charge a percentage of the first year savings and you only pay if you win your appeal.
3) Don’t assume no means no from everyone forever. Keep checking in on those mortgage companies on refinance opportunities. Home values fluctuate. Lending standards shift periodically. Every 6 or 8 months submit a new refinance query. It never hurts to ask.
I am sorry to say this but HARP 3.0 has essentially reached a dead end. That has left a lot of underwater home owners that were counting on HARP 3.0 to refinance in a bind. I am often asked to give my opinions on other options. In the past I have been hesitant to do so. I can not in good conscience suggest walking away from a debt. In some instances the best option, perhaps the only option, is a short sale. But I’m not qualified to give anyone specific advice like that. I always tell people to consult with their attorney or tax professional before contemplating any major change with their existing underwater mortgage. Until recently there really were no good alternatives to the Home Affordable Refinance Program. But a new program from Freddie Mac was just recently announced that may be able to help some people that were unable to take advantage of HARP. Some mortgage professionals have even dubbed the program “mini-HARP 3.0″. The program is called Freddie Mac 97% Refi: Home Possible Advantage. Here are the details on the program:
Maximum 97% LTV
Non-Freddie Mac and -Fannie Mae loans permitted
Borrowers must be at or below income limits for their area (click for details)
The current loan is not an FHA, VA, or USDA loan
The current loan had not been HARP-ed
No cash out option
Loan amount is less than $417,000
The property is a 1-unit home, condo or PUD
The new loan is a 15, 20, or 30 year fixed rate mortgage
So who does this new loan help? Well, if you were unable to refinance under HARP because your loan was not held by Fannie or Freddie and you are only a little underwater then this program might actually help you. The loan is only possible up to 97% LTV, but if you are only slightly underwater at around say 105% LTV, it might make sense to scratch together enough cash to get to the 97% LTV requirement in order to refinance into a significantly lower mortgage rate. Mortgage rates are still very low. Contact a trusted mortgage professional today if you think the Freddie Mac Home Possible Mortgage can help you refinance.
As hope for HARP 3.0 dwindles, the Federal Housing Finance Agency (FHFA) is making greater efforts to reach home owners currently eligible for the HARP program that have yet to take advantage. Starting in July the FHFA will conduct town hall style meetings in locations with the highest number of “in the money” HARP eligibles. Borrowers are considered “in-the-money” if they meet the basic HARP eligibility requirements, have a remaining balance of either $50,000 or more on their mortgage, have a remaining term on their mortgage greater than 10 years, and their mortgage interest rate is at least 1.5 percent higher than current market rates. The first town hall meeting will take place July 8th in Chicago at the Woodson Regional Library. FHFA Director Mel Watt along with housing experts and community leaders will be on hand to discuss the benefits of the HARP program. The FHFA believes the Chicago area has 36,000 “in the money” borrowers that could benefit from a HARP refinance. The FHFA also plans to do town hall style events in Atlanta, Detroit, and Miami later this year. The date and venues for those events have yet to be determined.
Frankly, I’m skeptical of the estimates of the borrowers yet to take advantage of the program. Every month I get mail from Ocwen, my mortgage servicer, urging me to call them about a HARP refinance. It is not uncommon for me to get HARP refinance offers from other mortgage companies like Quicken Loans too. I know I’m not currently HARP eligible. Why am I getting so much junk mail to refinance with HARP? I think the FHFA should be working to help make more people eligible for program. Regardless of my feelings, getting people that can take advantage of the HARP programs to do so is a noble effort. There are many advertiser links on this site for mortgage services that can help you refinance with HARP. So if you think you may be eligible to HARP there is no need to attend a town hall style meeting Chicago to find out. Just click one of the advertiser links and get started.
I’m not sure why I didn’t do this sooner. I’ve pulled all the active Congressional Bills related to HARP 3.0 and put them on a page specifically to track their progress. The link to the page is HARP 3.0 Bill Tracker. I also added a tab to the top menu so that the HARP 3.0 Bill Tracker Page can easily be found.
98% of the posts thus far on makeharp3happen.com have been aimed at efforts to support expanding the HARP program. This post is going to be a little different. There are millions of people that stand to gain if HARP 3.0 is ever to be implemented. But according to FHFA estimates there are 2 million+ home owners that are currently eligible for HARP 2.0 that are not taking advantage. I’m assuming that at least a few of them find there way to this website. Why are these people not using the Home Affordable Refinance Program? There are a lot of theories on why that is, but this quote from an article in the Pittsburgh Post-Gazette offers a solid clue:
“Many underwater HARP-eligible homeowners have been turned down before, and now they assume they can’t get help,” said Jim Svinth, chief economist for LoanDepot.com.advertisement
Timing is everything. Diane, one of the regular commenters on this website, can attest to that. She has been coming to makeharp3happen.com since it’s inception. She learned of a minor eligibility date change to the program made last Fall that changed her HARP eligibility. That change helped very few people. But that isn’t the point. The point is that the real estate market is changing everyday. What you were told previously, or what you thought about eligibility to refinance may no longer be applicable. It doesn’t hurt to try again. My suggestion to any underwater homeowner would be to talk to a mortgage professional at least once a year to find out where you now stand. Maybe like Diane you’ll find out that you now have options.
The HARP 3.0 Count Up Clock Petition is now closed. The final tally was 1509 signatures. I can’t even begin to express how disappointed I am with the result. I never expected to get to the 100,000 signatures needed for the White House to issue a response. But I did expect way more than 1500 signatures. What saddens me the most is how little the media seems to care about the the plight of underwater homeowners. We could get much more traction on this issue if the media fairly and accurately told our story. But to them the financial crisis is ancient history. You are three times more likely to see a story about how much the real estate market is improving than how badly underwater homeowners are still struggling. Anyway, here are some numbers from the petition effort that may interest you.
2628 clicks to the petition were generated from this website
the press release announcing the petition recorded 2354 reads
the press release recorded 182,841 headline impressions
I personally sent 377 emails with petition details to individual journalists/bloggers
Only 3 articles were posted that referenced the petition
Only 2 journalists replied back to the email I sent
In the two plus months since this website was launched there have been numerous complaints left in the comments section concerning HSBC. It is quite evident that HSBC is completely unwilling to work with the underwater homeowners they service. However, I have found a way to get HSBC to help you. Conduct any sort of illegal activity whether it be running a drug cartel or terrorist organization, and HSBC will be more than happy to help launder money from your illegal activities. Yes, it is true, HSBC has helped Mexican drug cartels and al-Qaida, but they won’t help underwater homeowners to afford their bloated payments.
I have made a number of updates to the website the last few days that should help raise the profile for the Make Harp 3.0 Happen movement. First, a new WordPress theme has been installed which should make the site easier to navigate. I also installed a mobile theme, so now finding your way around the site on a smartphone should be just as easy as using the desktop version of the site. I’ve also created a new email list to help mobilize support for future efforts. I urge you all to join. What I’ve learned from the petition is it takes a lot of work to get the message out. More than 1100 have signed the petition thus far and that has come almost solely from word of mouth. It is very difficult to get the media to cover the story. A large early response would have been helpful. I wasn’t really expecting this to become what it has. I created the petition to vent some frustration. It grew into this movement as I found many others just as frustrated. I want to rally support for future efforts much earlier. Building a base of contacts is critical to that. So please join the mailing list.
FOR IMMEDIATE RELEASE
January 23, 2013
White House Petition to Expand HARP Refinance Program for Underwater Homeowners Reaches 1000 Signatures
A petition calling for the Obama Administration to issue a formal request to the Federal Housing Finance Agency (FHFA) to eliminate the securitization cutoff date for eligibility in the Home Affordable Refinance Program (HARP) has received more than 1000 signatures since being posted on the “We the People” White House web site on January 9, 2013. The petition resides at: http://wh.gov/PQOH.
HARP is a federal program managed by the FHFA to help underwater homeowners refinance their mortgages at more favorable rates. Mortgage rates are now at historical lows of less than 4%. For the 11 million homeowners in the U.S. with negative equity, HARP is the only option for refinancing. When HARP was launched in 2009, it was believed that more than 5 million homeowners would benefit from the program. The program has fallen far short of that goal. Efforts last year by the Obama Administration and Congress to expand HARP have stalled. Homeowners frustrated by the lack of progress are mobilizing to support this petition.
The petition was originated by Marcus John, an underwater homeowner residing in Clementon, NJ. Marcus is one of the millions of responsible underwater homeowners that maintain good credit and are current on their mortgages, but are effectively shut out of the HARP program due to the arbitrarily set cutoff date of May 31, 2009. Loans secured by Fannie Mae or Freddie Mac after the cutoff date are not eligible for HARP.
If the petition garners 25,000 signatures, the White House will review it and issue a response. It will remain active through February 8, 2013. The petition reads as follows:
We Petition the Obama Administration to: Make a formal request to the FHFA to eliminate the securitization cutoff date for HARP eligibility and allow re-HARPing
Under the Home Affordable Refinance Program (HARP) The Director of The Federal Housing Finance Agency has authority to extend or eliminate the eligibility cutoff date. Currently the date is set as 5/31/09. Many responsible homeowners are unable to take advantage of the program to reduce their mortgage rates because of this date. On 3/17/12 HARP was revamped (HARP 2.0) and homeowners were given the power to shop for the best rates. However, those who previously refinanced under the original program are not eligible because of the arbitrary cutoff date and 1 time use limit set by FHFA Director Edward DeMarco. Eliminating the cutoff date and allowing homeowners a second chance to refinance under HARP 2.0 would help millions of Americans to save money on their monthly mortgage payment.
Contact: Marcus John
My name is Marcus, and I am an underwater homeowner advocating for the expansion of the Home Affordable Refinance Program (HARP). This is my story. In 2007 my wife Rosalie and I bought a three story townhome in Southern New Jersey. Shortly after moving in, my wife began developing severe back problems. With our two income household now down to just one income, keeping up with payments became a chore. Worse yet, the design of our home became increasingly difficult for my wife’s worsening condition. We looked into selling so we could move to a new home more suited for her. However, the financial crisis that led to the real estate collapse had just started to sink in, and we were soon too far underwater on our mortgage for selling to be feasible. Despite our woes, we never missed a payment on anything. In early 2009 when the original HARP program was made public, I immediately called Bank of America to see if I qualified. Luckily I did qualify, and it allowed me to refinance down to a rate of 5.37%. The savings in my mortgage payment coupled with a promotion in my career stabilized our finances, but it did nothing to remedy the inconvenience our home was for my wife. The real estate crash was still in the early stages. My home continued to plummet in value throughout all of 2010 and 2011. It became apparent that my wife and I would be trapped in a home ill-suited for her needs for the foreseeable future. Our options are limited. I don’t want to ruin my credit by walking away from my mortgage. I keep my obligations. I don’t want any handouts. I just want to fix our situation as quickly as possible, and the quickest way for me to do that would be to take advantage of today’s extremely low mortgage rates and refinance into a shorter term loan. I want to save cash and build equity quickly so I can sell this house and move my family to a home more suited for my wife’s needs. Unfortunately, that isn’t permitted under the current limitations of HARP set by Edward DeMarco, The Director of the Federal Housing Finance Agency. I have impeccable credit with FICO scores in the high 700s but I miss the arbitrarily set cutoff date for eligibility. 2012 brought promises from the Obama Administration of HARP expansion that would have helped me. However, those efforts fizzled when proposed Bills died in committee at the end of The 112th Congress. With the elections now over, the White House seems to have shifted its attention to other issues such as the debt ceiling and gun control. Frustrated with the lack of progress, I have spearheaded an effort to mobilize underwater homeowners like myself by circulating a “We the People” petition to raise awareness and hopefully encourage Washington to make this a priority once again. You can view and sign the petition here:http://wh.gov/PQOH
Want to tell your story too? Post it in the comments section.