Harp II…Does it Work?

Westcoe Realtors, Riverside California…It appears our elected leaders in D.C. are at it again, as they have announced in the past few weeks a new HARP program (Home Affordable Refinance Program, now called HARP II, or HARP 2.0 if you prefer) that is designed to work better than HARP I and help more home owners refinance who currently owe more money on their loan than their house is worth.  Since our clients read the papers also, we have been asked many times if this new program will work better than the original, which was generally viewed by the lending and real estate communities as a “joke” due to it’s horrible success rate.

Our answer…who knows?

In this blog space, we try really hard to be the voice from the trenches…from the real world of real estate, not the theoretical world that exists in sound bites from your favorite politicians.  While we laud the intentions of the Washington D.C. politicos who have once again ventured into our world with what we assume are the best of intentions, we can only hope that the lending community embraces these HARP II guidelines with less disdain than their predecessor.

You see, the problem with many government mandated lending programs is that the politicians can shout all they want about what lenders “have” to do, but in the real world, these same lenders have shown a consistent propensity to do whatever they want.  It’s sort of like telling your teenager to take out the trash…and then they smile, nod, and then do what they want…and you can’t even ground them!

HARP I was mostly viewed as a rousing failure, because when it comes to government edicts, the devil is truly in the details…and the details were not exactly embraced by the very lenders who were “invited” by the government to make the new loan adjustments.

HARP II promises to cure these previous ills, and streamline the process for the underwater home owner, but again, the proof will be in the pudding…a pudding that tasted pretty bitter the first time around.  It is far too early to tell yet whether HARP II has simply traded one set of problems for another, but if past history is any indication, we in the real estate community are not exactly holding our breath.  Don’t get us wrong…we would like nothing better than to see a well intentioned refinancing program work.  It’s simply that we have learned to take a “wait and see” approach with government lending programs.

So…what do we suggest you do if you think HARP II is for you?  Simple…contact either your existing lender or a local lender you trust (call us if you want a referral…Westcoe doesn’t do loans, but we use reputable lenders every day), and let them guide you through the process.  There are a lot of restrictions and conditions you will need to know, and a good lender can get you pointed in the right direction.  Hopefully, things will go smoothly for you and you will get the refinanced loan you desire.

We also suggest that you maintain a ton of patience and don’t get too set on the success of your HARP II loan refinance, as while our hearts are with you, our heads are filled with the past attempts that have gone wayward due to the government’s inability to make the banks get on board. 

In other words, the politicians can shout “all aboard” all they want…our experience is that engines will run when the engineers (the banks) want them to, not when the conductor stands there shouting.

Take care, and have a great week.