HARP 2.0

Guest contributor Ted Jones posts the following on the Stewart Title blog:

Fannie, Freddie & MBA Forecast Changes Oct 2011 to Nov 2011

The President announced a change to the HARP program (essentially loan modifications to borrowers with loans that are currently held by Fannie Mae and Freddie Mac that are performing but underwater).  The real key to these modifications is that now the lender is no longer responsible to purchase the loan back from the GSEs if something goes askew.  Economists have estimated that from 1 to 2 million homeowners would refinance under this new program that otherwise would not been able to lock in at almost record low interest rates under the prior version.

The tables below show the change in the forecasts from Oct 2011 to November 2011 in 1-4 family residential lending.  The focus here is on the impact on refinance volumes arising from HARP 2.0.  While the announcement for HARP 2.0 was October 24th with the guidelines and rules released by November 15th, It is not known at this time whether each of these entities factored in the potential impact on refis. (I have sent emails inquiring as such).

That said, it would appear that Freddie Mac has incorporated HARP 2.0 into their forecasts with an increased refi in 2012 of an additional $130 billion and $189 billion in 2013.

It will be interesting to see what the December forecasts from Fannie Mae and the MBA bring, if any.

To view the original article, visit the Stewart Title blog