With the Home Affordable Refinance Program (HARP) set to expire at the end of the year, Federal Housing Finance Agency (FHFA) Director Mel Watt is seeking to lay the foundation of a market that will not leave at-risk homeowners in difficult financial situations.
Speaking today in Washington, D.C., at the Public Policy Luncheon sponsored by Women in Housing and Finance, Watt noted that his agency and the government-sponsored enterprises were working with to lenders, mortgage insurers, and investors to study a post-HARP endeavor that would accommodate high loan-to-value (LTV) borrowers.
“During our outreach discussions, we are reminding industry participants that borrowers who previously completed a HARP refinance will not be eligible to refinance under a new high-LTV program,” Watt said. “When we conclude our outreach, the enterprises will publish an announcement that reflects the eligibility guidelines and product terms that we believe will meet the needs of high-LTV borrowers in the future.”
But with nine months to go before HARP runs its course, Watt stated that the FHFA would work ensure borrowers can take full advantage of that program’s benefits.
“Despite extensive outreach efforts by the enterprises and their lender partners, over 360,000 borrowers nationwide still remain both eligible for HARP and able to benefit financially from HARP,” said Watt. “FHFA and the enterprises are attempting new methods to raise borrower awareness through social media and Webinars, and we are asking stakeholders to help us get the word out about HARP before the end of the year.”
Also during his speech, Watt briefly alluded to the once-contentious but now barely-mentioned subject of principal reduction with a promise that he would decide in the next 30 days whether it was officially a non-issue or if there was a "win-win" approach to this strategy for future policy planning. "So, while I don't have an answer today, I invite you to stay tuned for more on this in the near future," he said. "As always, our decision and the reasons for making it will be documented and transparent."
