The National Mortgage Refinancing Dilemna


Stock market drops, more unemployment claims, housing prices dropping - this "economic recovery" we are supposed to be having does not look like much of an economic recovery! One way our buddies in Washington have thought of helping the economy is to widen the HARP and HAMP programs to become more widespread so more people can use them (since not very many people did!) I know I recently received yet another letter in the mail from Quicken Loans saying that I might be eligible for the HARP program. But when I went through their program requirements  I did not meet the proper criteria for the special HARP program and would only qualify for a more standard loan refinancing. It seems like anyone with 5% equity in their home must go through a standard refinancing, and for us that is simply not worth the closing costs since our rate is already reasonably low (4.910%) and our loan amount is small (under $100K.) So now I am curious what particulars are in the latest Washington plans to expand the HARP program to reach more homeowners. In the past Congress only seemed to want to help the people that the lenders do not want to lend to, and that is part of the reason the participation rate is so low. Congress set the program up to help those people "over their heads" in debts and payments and that is exactly who the lenders do not want as borrowers. An article in Time magazine sums it up nicely, saying "all parties involved have to play". If Congress sets up a plan too difficult and complicated for homeowners to understand with unfavorable terms and conditions for the lenders involved, why would anyone want to use it? I would really like to see the details for the new plan so I can modify my online calculator so that it can reflect the new plan (hopefully one that will work better for both homeowners and for lenders.) 

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