The Federal Housing Finance Agency has news for anyone with real estate in Chicago that is underwater – the government’s Home Affordable Refinance Program, or HARP, is being extended from the end of 2013 to the end of 2015. The program, which had a rocky start and stringent entrance requirements, has become wildly popular with homeowners.
Things were not always going this swimmingly for the HARP program. Started by the Obama White House in early 2009 to help underwater borrowers refinance their mortgages, HARP was originally set to end on June 10, 2010, but after the program’s performance failed to meet expectations, its deadlines were extended, and the program became an unfortunate poster child for the administration’s tacit response to the housing crisis.
HARP’s refinancing activity in 2010 and 2011 continued to disappoint, and finally, in late 2011, the Obama administration announced a series of changes to the program. Dubbed HARP 2.0, the revisions abolished many of the program’s pesky technicalities and lifted its 125 percent LTV restriction. Since then, refinancing activity under HARP has soared with more than one million homeowners refinancing their mortgages in 2012 alone! For some perspective, that’s the same amount of refinancing that HARP generated in its first three years of existence.
HARP has been part of the housing recovery process with 44 percent of its more than one million borrowers classified as underwater when they took part in the program in 2012. By helping these homeowners out, they are now able to enter the marketplace and boost the economy.