Refinancing on the rise, HARP 3.0 could relieve more underwater homeowners

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Toward the end of April, refinancing activity was up and talk of a new version of the Home Affordable Refinance Program (HARP) was making its way through the industry.

As reported by the Mortgage Bankers Association (MBA), the Market Composite Index (MCI), which measures the volume of refinancing applications, had increased 1.8 percent on a seasonally-adjusted basis. On an unadjusted basis, the index was up a full 2 percent.

According to the MBA, applications for HARP took up 34 percent of mortgage applications compared to 32 percent the week before, the highest share since MBA began tracking HARP activity in February 2012.

The increase in HARP refinancing may have something to do with the fact that the national average mortgage rate has increased slightly, which may have prompted some folks to lock in a low rate quickly, before the rates could increase further. On the other hand, some homeowners may have been unaware of their eligibility for HARP until recently, when President Barack Obama relayed a message to Congress, calling on them to “give every responsible homeowner the chance to refinance, and with it, the opportunity to save $3,000 a year.

Since its original inception, HARP has had some changes that allowed more homeowners to qualify for this money saving assistance program. Commonly referred to as HARP 2.0, the latest version of the program allowed homeowners with private mortgage insurance to qualify. Additionally, it released the limit on negative equity for mortgages up to 30 years. Homeowners who were unaware of these changes may have presumed that they were ineligible. Thanks to renewed public interest and an improving real estate market overall, it could be said that more homeowners are becoming informed of this valuable resource.

Additionally, HARP 2.0 prompted more and more lenders to offer HARP refinancing, as it freed them from any liability for issues that arise from a borrower’s first mortgage. With more security for lenders, HARP 2.0 was a much more attractive product to offer, which certainly opened up the program’s accessibility for homeowners.

Since President Obama’s refinancing comments, many industry experts are anticipating yet another version of HARP in the coming year. As it currently exists, HARP is only available to underwater homeowners who have a mortgage that is owned by Fannie Mae or Freddie Mac. There is talk that if a HARP 3.0 does pass, it would open up eligibility to any underwater homeowner, even if they do not have a Fannie/Freddie mortgage.

According to the president, the goal of the Making Home Affordable Program is to make homeownership affordable for all Americans, so the inclusion of private label mortgage lenders in the HARP program would make sense. If you are curious about HARP or other MHA initiatives,  visit or contact a reputable mortgage lender to inquire about their HARP eligibility requirements. You can find lenders using the rate tables on You’ll need to reach out to them individually to see if they offer HARP solutions.

Steph Meyer is a contributor to the Blog and keeps us up to date on interesting happenings within the world of home financing and real estate. She’s got a quick wit and keen eye on making smart financial decisions. My Google Profile+

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