According to a report from Reuters, recent comments by Department of Housing and Urban Development Secretary Shaun Donovan suggest that the government is considering new rounds of refinancing aid for American homeowners, beyond the recent revisions to the Home Affordable Refinance Program (HARP).
Though Harp 2.0, as the new program has been dubbed by the press, was a long anticipated and, by some outlets, welcome revision to an underwhelming program, its scope is still limited to borrowers with Fannie Mae or Freddie Mac mortgages with LTV ratios of at least 80 percent. According to Donovan, a new program could fill that void.
“There is a real opportunity to improve and increase refinancing more broadly, given where interest rates are,” Donovan said, according to the Reuters piece.
In addition to extending HARP refinancing to borrowers with LTV ratios less than 80 percent, Donovan also said that the government could look in to streamlining the refinancing process and finding ways for the mortgage industry to eliminate the fees and appraisal requirements that often trouble new loan agreements. Whether this would impact borrowers with private mortgages remains to be seen.
One thing that hasn’t changed, Donovan said, is the government’s stance on federal loan limits. In early October, the White House supported the decrease of federal loan limits, arguing it was a necessary step for the government to lessen its mortgage footprint (Fannie and Freddie currently handle 9 out of 10 new mortgages). With the Senate passing a limit increase, though, some are wondering if the limits will be reinstated.
“We’ve always said that we have to make sure that we’re taking these steps in concert with what’s happening in the market and ensuring that we’re supporting recovery,” he said. “Obviously, that’s the debate Congress is having, which is, ‘Did they go down too soon?'”