This time, the sequel is better than the original

Rarely is a movie sequel better than the original. I feared that HARP II (Home Affordable Refinance Program) would be another empty “cotton candy” promise from Washington with a lot of fluff and no substance. I am happy to see that I was wrong. Recent verified results are making me a lot more optimistic about this program to help homeowners and INVESTORS, who owe more than the property is worth and have been unable to refinance in the past.

Property owners may go to to see if their property is eligible. At present, this program is only for conventional loans, and not for FHA or VA. If a property owner has a FHA or VA mortgage, it is worth checking to see if they qualify for a streamline refinance. FHA and VA streamline loans are characterized by relaxed standards that exhibit a lot of common sense that I though was gone from the mortgage industry. I recently witnessed an individual close two loans under the HARP II program for his primary residence and rental property. There were no upfront fees for an application or appraisal, and the customer service was first rate.

I was pleasantly surprised to see that HARP II may used for investment properties. Normally, property owners will let a rental property go into default instead of their primary residence. While I am not in favor of government funded bailouts for the fat cats, almost everyone involved in a foreclosure is damaged. Not usually mentioned are renters who are displaced and have to find a new place to live in a tight rental market. In some parts of the country it is easier to qualify for a mortgage than it is to rent a property. Hopefully, letting investors benefit from HARP II will result in fewer displaced renters.

Chip Allen

Crestline Mortgage Bankers

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