By Marc Pearlman
Back in 1986, President Ronald Reagan referred to the line "I'm from the government and I'm here to help you", as the ten most terrifying words in the English language. Well, as the housing crisis continues, the government is knocking on the door again as they roll out HARP 2.0.
The original Home Affordable Refinance Program, HARP, was created in 2009 to assist struggling "underwater" homeowners who owed more money on their homes than the home was worth. Homeowners could refinance their mortgages and take advantage of the historic low rates if they met certain eligibility requirements. However, the plan has been criticized by some pundits for falling short of expectations.
"HARP has been around for a couple of years but hasn't been that helpful to that many people," says Bob Walters, chief economist at Quicken Loans, according to Fox Business, adding that many people who needed the help were unable to qualify for it.
What's new with HARP 2.0
HARP 2.0 extends the original program until the end of 2013 and loosens some of the eligibility restrictions of the original HARP program.
In order to qualify for the original HARP program rolled out in 2009, a homeowner's loan-to-value ratio needed to be less than 125 percent. This cap left many homeowners out in the cold as their home prices dropped sharply in price causing their LTV to rise above 125 percent.
Under HARP 2.0, the 125-percent LTV cap has been removed for homeowners looking to refinance Read the full article »