The creation of HARP 2

On October 24, 2011 The Federal Housing Agency, along with Fannie Mae and Freddie Mac announced an extension of the HARP Program (Home Affordable Refinance Program) called Harp 2, to extend the reach of the original program that was launched in March of 2009.  The HARP program was developed to provide financial relief to homeowners by helping them to lower their monthly home mortgage payment, through refinancing.  With todays rates much lower, the ability to refinance saves homeowners significant money.

Prior to the HARP Program, many homeowners were unable to take advantage of today’s lower interest rates, because the value of their home (the loan’s collateral), had dropped below the value of the loan.  Without sufficient collateral, lenders won’t make new loans, leaving the borrower “stuck” in their higher rate loan.  Because the HARP II Program further loosens the lending guidelines, it is expected that millions of homeowners who weren’t able to refinance under the original HARP Program – will be able to do so now.  Extending the HARP Program is intended to create opportunities for homeowners, reduce risks for Fannie Mae and Freddie Mac, and bring stability to the housing market

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