Can You Refi Me NOW?

The Home Affordable Refinance Program (HARP) was intended to help folks whose homes were worth less than their mortgages get refinancing on better terms, but has been hamstrung by limitations. First, the mortgage had to be owned by the government and only underwater within certain parameters. Then we had the revision early this year that made it possible – but not required – for servicing banks to refinance homes (still owned by the government) outside those parameters.

But what if your mortgage wasn’t owned by the government? Or your bank decided not to play the HARP? You were out of luck.

There are currently before Congress several pieces of legislation to change that.

One proposed bill is the Responsible Homeowner Refinancing Act of 2012, sponsored by Senators Barbara Boxer and Bob Menendez. The act gives HUD the authority to extend streamlined refinancing to all loans insured by government-sponsored enterprises. This means that borrowers with GSE loans would no longer be hindered by appraisal or loan-to-value requirements.

Another proposal would enable refinancing for borrowers with non-government-backed mortgages. These borrowers would be eligible if they are employed with good credit and are up to date on their mortgage; certain limits to the mortgage amount would also apply. While the FHA would run the program, the financing would come from outside the administration.

And a third proposal is to permit cross-servicer refinancing under the same rules as servicer refinancing. This would mean that if your mortgage bank didn’t want to play, you could take your mortgage to another bank, who could do the refi under the same program.

It’s being called HARP 3. Watch for news of it.

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