Fannie Mae and Freddie Mac’s updated version of the Home Affordable Refinance Program, HARP 2.0, kicked off earlier this month. The HARP program is intended to help Fannie Mae and Freddie Mac borrowers who owe significantly more than their home is worth. The previous version of the program could be used to assist borrowers who owed up to 125% of their home’s market value refinance their mortgage. The newest version removes the cap, allowing borrowers even more deeply underwater to obtain a new mortgage at a lower interest rate and more affordable monthly payments – up to 11 million additional borrowers according to some estimates.
But those borrowers will have to pass stringent requirements to qualify for refinancing under HARP and servicers will have their work cut out for them helping those who do pass the test. One of the main reasons the previous version of HARP didn’t produce the results the Obama Administration had hoped for was the numerous complex program requirements that servicers needed to decipher and adhere to.
The story will likely be the same this time around. The servicers who will succeed in helping qualified borrowers refinance will ultimately be those who have the time and resources to intimately learn the HARP requirements and comply with all of them. Of course most servicers have neither the time nor the resources to do so. That’s when it may be time to look for outside help.
Partnering with the right provider can help servicers improve efficiencies, reduce expenses and better mitigate risks tied to HARP. That provider will have needed mix of technology, services and expertise to help the servicer more effectively manage fluctuating refinancing volumes, regulatory demands, and new program requirements.