The Wall Street Journal reports on the Home Affordable Refinance Program, or HARP.
It is supposed to help homeowners with little equity in their homes. It’s another political plan to gum up the free market and make it less efficient.
So far, only 60,000 borrowers have refinanced through the program.
It’s only for homeowners who are making their mortgage payments.
You have to owe more than 80% (but less than 125%) of your home’s value and your mortgage loan needs to be owned or guaranteed by state-backed mortgage-finance companies Fannie Mae and Freddie Mac.
Big surprise! This program requires a ton of paperwork and there are a ton of complications and this clunker of a bailout is about as effective and efficient as the Cash for Clunkers program.
Treasury officials say that the program was slowed by a plunge in mortgage rates that sparked a flood in refinance applications just as the administration rolled out the program. Thus banks were busy refinancing “run-of-the-mill” mortgage applications before moving on to HARP applications, which could be more complex to process. By then, mortgage rates had risen.
Officials say that the program is expected to ramp up more fully later this year as it irons out technical hurdles. Logistical problems, from difficulty addressing second mortgages to mortgage insurance, have raised confusion and contributed to delays as borrowers work with their lenders who are charged with administering the program.