Old Harp or new Harp

Harp, which stands for the “Home affordable refinance program,” was put together by the federal government in March of 2009 to help homeowners whose property values had fallen “underwater,” in other words, below their current mortgage balance.

The current program allows a customer to refinance a mortgage that is up to 125 percent of the value of the property. It also has easier credit restrictions and in some case easier income restrictions. The current program was projected to help 2 million borrowers, but to date has helped only 800,000, falling far short of expectations.

The new Harp program, which is expected to be released in early 2012, is rumored to be able to help customers refinance mortgages up to 150 percent of the value of the property, and have much easier income and credit restrictions.

This was done with the hope that borrowers will be able to refinance their mortgages, reduce their monthly payment or term, and hopefully inject some much-need money into the stalling economy.

It will be interesting to see if the federal government’s plan will save the housing marking or if it will be too little, too late.