Fiscal Cliff Deal May Lead to “HARP 3” for “Non-Agency Mortgages”
Good news arising out of the “fiscal cliff” negotiations.
The Treasury Department reportedly ( Wall Street Journal and Washington Post ) is pushing a new housing initiative.
Referred to as “Market Rate Modification Program” (“HARP 3”); it allows neg equity home owners with “non-agency mortgages” to refi at today’s low interest rates.
Currently millions of Alt-A, sub-prime, option arms , and jumbo loans , are not eligible for the existing government refi programs (i.e. HARP 2).
Treasury Department studies conclude these “p rivate-label mortgages ” , make up only a small percentage of total mortgages (approx.12%) but account for 62% of the delinquencies.
The Treasury Department’s reasoning is “HARP3” would make many homeowners (who have been hanging on by their fingernails) think twice about walking from their “neg equity properties).
Editor’s Note: This program combined with the negative tax consequences of the Dec.31st expiration of theMortgage Taxpayer Relief Act of 2007 , should provide MORE THAN ENOUGH motivation for home owners to keep their neg equity properties.
How the Market Rate Modification Program Would Work
1) Min. 680 FICO scores
2) Max. 150% LTV
3) Owner Occupied Only
4) Max. Loan $625,500
5) No mortgage lates in the last 12 months
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