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Banks not offering full HARP 2.0

Now that the widely anticipated HARP 2.0 has been released why am I not surprised to see banks choking the program out again (like they did on the first HARP release) with their own overlays based on unjustified fear? Do they think a homeowner that is totally underwater and has continued to make their payments on time is going to refinance into a lower rate and then decide to stop paying the mortgage??

I work with many lenders (including a few that are utilizing the FULL capability of both Fannie and Freddie HARP 2.0) and so many of them are capping the program at 105% or 125% LTV. How is that going to help people? More banks need to open there eyes to the problem and start helping us reverse this economic crisis that they caused on the first place!

Feel free to comment if you'd like to share your input.
  • March 27 2012 - US
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Answers (1)

Do they think a homeowner that is totally underwater and has continued to make their payments on time is going to refinance into a lower rate and then decide to stop paying the mortgage?? 
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yes. If you're far enough under, many just think of it as lowering their rent.

  • March 27 2012
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