Home Economics: HARP 2.0 is up and running At long last, HARP 2.0 is available to Fannie Mae and Freddie Mac borrowers who want to refinance but owe more on their mortgages than their houses now are worth. HARP 2.0 - HARP stands for Home Affordable Refinance Program - is being billed as an improvement over the three-year-old version that just about everyone acknowledges didn't help anyone. The reason for that failure: The original program had limits on loan-to-value ratio, the amount of a mortgage as a percentage of the appraised value of a property. If the balance of a mortgage exceeded the appraised value - say, $300,000 versus $150,000 - the borrower wasn't allowed to refinance. Recognizing that none of the borrowers the program was intended to help would be able to qualify, the limits were dropped when the new version of HARP was heralded in October. Does that mean all lenders have agreed to no limits? "I have lenders that have limited the loan-to-values. Some have even differentiated between attached and detached homes," said Philadelphia mortgage broker Fred Glick, who has launched a blog, http://harp2.com, to update consumers. "They still are limiting what they will do" with LTVs of 150 percent and no more. "All in all, it is a great way to get people's rates down in spite of low values," Glick said. "This will decrease the supply of homes for sale and increase values over the long run." As with all these programs, the months since HARP 2.0 was announced have been spent trying to get lenders on board - no easy task since Fannie and Freddie loans are pooled as mortgage-backed securities that are owned by many investors. All the investors need to agree before you can apply to reduce your monthly payments to today's low fixed interest rates, which remained under 4 percent for many months but now are beginning to increase as bond yields rise in an apparently improving economy. As of March 17, HARP 2.0 has been in place to, theoretically, help you keep your house above water. About four million Fannie Mae and Freddie Mac borrowers nationwide owe more on their mortgages than their homes are worth. To determine whether either enterprise owns your mortgage, check at http://fanniemae.com/loanlookup and http://freddiemac.com/mymortgage. Those links also can be reached through http://www.makinghomeaffordable.gov, which has details about HARP 2.0 and other information.
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