When HARP 2.0 passed in March of 2012, most were skeptical about it’s effectiveness. FHFA announced Friday that from January to July of this year over half a million loans were refinanced with the program. These new numbers are on track to meet, and surpass, original estimates by the end of this year. In fact, in just 7 months the program has far surpassed the 400,024 HARP refinances completed in all of 2011.
The program’s success has been attributed to record low interest rates and to several key changes in the HARP policy – most notably the removal of the Loan to Value ceiling, or LTV. In HARP 1.0 homeowners who were current, but underwater more than 125% were not eligible for a refinance. HARP 2.0 however, has no limit on LTV.
In June and July over half of borrowers who refinanced with HARP were underwater by more than 105%.
It’s hard to know for certain how long government programs like HARP will be in place, especially in an election year. If you think you may qualify to refinance under HARP 2.0 don’t wait to take advantage of record low interest rates.