mortgage news and opinion for past, present and future clients

November 15th the changes to the program that allows borrowers who are underwater to refinance (HARP) were announced. The changes have been making headlines for a while and we were all sitting on the edge of our chairs waiting to hear how the government was finally going to intervene to help struggling home-owners. The announcement, in my opinion, was anti-climactic.

The most notable changes are the following:

• The limit of 125% loan-to-value has been removed
• The rates for new loan terms of 20 years and shorter should be a lot better
• The rates for new loans of greater than 20 years will have better rates (but not as good as 20 year rates)

The trouble that I see is that a) it’s still a voluntary program for the banks and MI companies and b) they still aren’t fixing the problem. Officially, yesterday was the first day that I could take applications for new-and-improved HARP refinances. Unfortunately, the pricing changes that are going to lower rates aren’t going into effect until JANUARY 3RD! Oh, and by the way- the changes to the maximum loan-to-value don’t go into effect until MARCH 2012! Oy vey.

Also, we’re just now getting “guidance” from the big banks about whether or not they’re going to participate in the program and how they’re going to augment the guidelines. We just got word from several of our banks stating that they are delaying implementation of all changes until March.

So, I know you’ve been hanging on, waiting for someone to come along and help, but the government and banks are saying to you, “Just wait a little longer.”