President Obama’s HARP 3.0: Streamlined refinancing for all

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If it was up to President Obama, along with mortgage bailouts for those behind on their mortgage, every homeowner who has been paying their mortgage on time should be eligible for a streamlined refinance to take advantage of today’s record low mortgage rates.

That includes homeowners who are “underwater” and owe more than their home is worth.

Also see: “The HARP Archive” on DeadlineNews.Com for the latest HARP news.

Would you qualify? See the interactive worksheet at the end of this story.

Throwing the weight of the White House behind “Responsible Homeowner Refinancing Act of 2012,” legislation U.S. Senators Robert Menendez (D-NJ) and Barbara Boxer (D-CA) recently introduced, the president just opened an interactive page on the White House website dedicated making his Home Affordable Refinance Program (HARP) all that it can be.

It’s the blueprint for what many have called “HARP 3.0.”

The page highlights how today’s record low interest rates can bring financial relief to homeowners even if they don’t have Fannie Mae and Freddie Mac (government sponsored enterprises or GSEs) loans, a requirement of the current HARP program.

Refinancing to lower payments, on average, would save households an estimated $3,000 a year and, in turn, reduce the risk for lenders.

Unfortunately, problems with existing refinance programs, today’s complicated home loan gauntlet, costly appraisals and the underwater status of many make millions of homeowners ineligible for refinancing.

It could be decades before rates are this low again.

The “President’s Refinance Plan” is a streamlined refinance process for homeowners current on their mortgage – no tax forms and no appraisals – especially for underwater homeowners who’ve been locked out of refinancing.

The programs calls for both 20-year and 15-year mortgage refinancing for homeowners who can afford what could be a larger payment, as well as the conventional 30-year mortgage.

Shorter term loans could help homeowners build equity faster and save GSEs more than the closing costs GSEs sometimes pay under the current refinance programs, according to a White House spokesman.

Those who don’t have government loans would have a Federal Housing Administration (FHA) option. FHA loans are insured by the federal government.

“But we’ve been very careful to pick borrowers who are low risk. These are borrowers who’ve been paying their mortgage on time for at least six months, and in many cases for many years, so we think it is a manageable level of risk,” said the spokesman in a video on the new White House web page.

So what’s the catch?

Congress has to act.

FHA loans virtually replaced subprime mortgages and so many FHA loans have failed the federal agency’s reserves are lower than Congress mandates.

“The President’s Refinance Plan” web page outlines the proposal, reveals estimated savings for homeowners who refinance, helps homeowners determine if they would qualify and provides a forum for feedback, along with other information.

About the author

DeadlineNews.Com's Publisher, Executive Editor and Founder, Broderick Perkins, was the first real estate journalist to manage a daily newspaper's online real estate section. He parlayed more than 30 years of old-school journalism into a digital real estate news service offering "News that really hits home!" -- the Silicon Valley bootstrap, DeadlineNews.Com. Network with Broderick Perkins on LinkedIn, FaceBook, Twitter, Google+ and the Bloomberg Business Exchange.

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