Make a few adjustments and things work out. That logic works for baseball (pitching mechanics, batters swing) and apparently it works for the HARP re-finance program. Since the government altered its Home Affordable Refinance Program the number of HARP re-fi loans jumped to more than 20 percent of refinance applications during the week ended February 24 up from 10 percent the previous month.
Moody’s Analytics predicts an estimated 1.6 million HARP re-fis will be completed through the end of next year with borrowers garnering monthly savings of $250 on average.
To be eligible, HARP applicants must have loans owned or guaranteed by Freddie Mac or Fannie Mae, have less than 20% equity and be current on payments.
Moody’s Analytics expects 1.6 million HARP re-fis by the end of 2013.
Even with mortgage rates dipping below 4%, CoreLogic says 57% of first lien home loans had rates above 5% in December.
Don’t think of HARP as a silver bullet for homeowners. HARP may reduce the monthly payments of underwater homeowners but for many it will only prolong the bleeding of a bad situation. For these homeowners a re-fi will only extend the time that they pay the bank money while NOT building up any equity.