Marc Guzman's West County Blog

After all the big hype by the government in releasing a new version of the Homeowner Assistance Refinance Program (HARP), HARP 2.0 was released today.  The biggest obstacle that the original refinance program ran into was a cap of 125% Loan-to-Value ratio.  This meant if your property was more than 25% underwater, then you would not be able to refinance.  Well that made it very difficult for many homeowners because with the large decline in home values, most underwater homeowners were well above that 125% cap.

So the idea of HARP 2.0 came into play.  There were several changes but the most significant change was the removal of the 125% Loan-to-Value cap.  This would have allowed many more homeowners to refinance and obtain a lower interest rate on their mortgage.  Today, on February 6th and after much delay, HARP 2.0 was released but with a huge disappointment… the cap of 125% Loan-to-Value still remains.  There are several minor changes in the new refinance program but the most significant change needed was not made.

So for the homeowners underwater that were limited by the 125% cap and who were hoping to refinance to save a few hundred dollars a month, today was an unfortunate day.  But maybe there is some hope with a new refinance program that Obama hinted at for later this year.  I guess we will have to wait and see…

Marc Guzman