Home Affordable Refinance Program, currently known as HARP 2.0, the only refinance program available for Fannie Mae and Freddie Mac mortgage holders, is not helping enough underwater homeowners because lenders are placing overlays on program. Though HARP 2.0
has an unlimited loant to value (LTV), most lenders have an overlay of
the maximum negative equity homeowners can have in order for the
underwater home to be refinanced.
Additionally, some lenders are requiring an appraisal even though an appraisal waiver is all that is needed.Other
lender placed exceptions such as non-eligibility of condos, 2nd homes and investment property and waiting criteria
(where there is none in guidelines) if homeowner had a past short sale on another property are common.
HARP 2.0 is the only refinance option for underwater homeowners who wish to stay in their home. Lenders continue to solicit lower LTV HARP loans or have sold their portfolio of higher LTV HARP eligible mortgages to servicers who specialize in HARP refinancing. Even though this program could assist many of the 7.1 million distressed homeowners still living in underwater homes as recently as Jan. 2015, lenders continue to offer this refinance program at limited LTV.