Important changes to the Home Affordable Refinance Program (HARP)

The Senate passed an amendment to an appropriation bill that would restore the $729,750 loan limits through December 2013. Both Senate and House are now working out the differences between the Senate bill and the House bill, which the House passed earlier this year. However, it did not reinstate the higher loan limits. There would be a 2 year extension on the conforming loan limits if the House and Senate agree on a final bill. The California Association of Realtors is also working with the California Congressional Delegation to ensure this provision is included in the final bill.

There's also changes coming down the road to help distressed borrowers. Late October, the Federal Housing Finance Agency (FHFA) announced important changes to the Home Affordable Refinance Program (HARP) to help millions of underwater borrowers whose mortgages are backed by Fannie Mae and Freddie Mac.

If these changes are implimented, it will allow those borrowers who are current with their mortgage payments to save nearly $2500 year with mortgage refinancing. The new HARP program will also help the refinance process, with the appraisals and underwriting requirements and helping to eliminate fees that hindered homewoners from refinancing previously.

Banks may be able to start issuing refinanced loans by Dec. 1, since the FHFA is working on details of the new rules, which should be finalized by Nov. 15.