HARP 2.0: Banks See Upside to Revamped Refi Program

Lenders and business that can help them find refinancing prospects stand to profit from the Obama Administration’s recently revamped Home Affordable Refinance Program, now dubbed “HARP 2.0.”
HARP, like other foreclosure prevention efforts by the administration, has struggled to reach the targeted number of borrowers since 2009, so President Obama announced in October that it would be vastly expanded.
With the enhancement, the program now can reach a greater number of “underwater” borrowers who owe more on their mortgages than the worth of their homes – but they must be current on their payments to qualify.
Borrowers with loans backed by Fannie Mae and Freddie Mac, with a current loan-to-value (LTV) ratio of 80 percent and higher, can get their loans refinanced. In the previous incarnation of HARP, there was an LTV ratio limit of 125 percent.
Analysts now forecast refinancing applications to jump, with HARP 2.0 representing roughly one-third of refinance efforts. According to TheStreet.com, banks stand to benefit from gains on sale of HARP loans, which command a stronger premium in the mortgage market.
HARP could provide as much as $12 billion in added mortgage banking revenue to the industry, offsetting the negatives of lower interest rates, according to TheStreet.com
Businesses that help banks find refinance candidates under HARP 2.0 eligibility rules also stand to benefit.
The analytics firm CoreLogic is promoting a proprietary database and patented valuation technologies to help lenders identify more than 2.3 million borrowers with a strong likelihood of potential eligibility for HARP 2.0.
“The new HARP 2.0 guidelines provide a great opportunity for homeowners with negative equity who were previously unable to take advantage of historically low interest rates and refinance their existing mortgages,” said Anand Nallathambi, president and CEO for CoreLogic.
Purple Leads, a lead-generating marketer, is also promoting its services to help clients find HARP 2.0 candidates.
“Obviously, people are still scrambling to fight the foreclosure process,” said a Purple Leads statement. “And now that the Federal government has expanded the reach of the HARP program to create HARP 2.0, there are tremendous opportunities for mortgage companies looking to make use of quality HARP 2.0 leads.”

Leave a Reply

Your email address will not be published. Required fields are marked *