Categorized | Finance and Mortgage

New HARP Program Targets Underwater Mortgages

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Homeowners across the United States may soon be receiving some much-needed relief.

For the last few years, those with underwater mortgages have received little help from the government or lenders. With a mortgage loan that is far greater than the actual value of his or her home, homeowners have had to pay substantial amounts each month, and have not been able to refinance to the current record-low rates. However, all that is about to finally change for some.

Unlike the first HARP program, appraisals will not be needed to qualify for refinancing. As such, there will be no loan-to-value ratio qualification preventing certain homeowners from receiving the program’s benefits.

The first HARP was widely criticized for not helping those who were actually paid their monthly mortgage, but rather those that struggled with delinquency. This new version of HARP will now help those that are paying their mortgage on time, but are paying far more than they should due to a higher interest rate.

While the second version of HARP will reward those that have remained current with their mortgage, and have no intention of walking away, there are some groups that are not in favor of the changes.

These groups believe that the program will cost the government and taxpayers millions of dollars to make up for the losses experienced by the lenders. These groups are against any kind of government intervention when it comes to mortgage loans.

Those in favor of the new program, however, believe that, by allowing responsible homeowners to refinance, the economy will receive a boost. The money that would have gone to their mortgage payment will instead go to other areas of spending, thus stimulating the economy.

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About Ella Jourgeson

Ella was recently an intern who checked all the articles for grammatical and spelling errors. She is now an all purpose writer filling in wherever we need help.

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