POSITIONS ON THE ISSUES CAN CHANGE for both politicians and regulators. And so it was in May when MEL WATT, he of the Federal Housing Finance Agency (FHFA), seemingly contradicted himself. [paragraph] In March, the FHFA director said point-blank that the Home Affordable Refinance Program (HARP) would not last forever. "In the long term, I don't think you can think about extending the deadline," you may recall him saying.
Fast-forward not 60 days later, and Watt had a change of heart. In a May speech in Los Angeles at the Greenlining Institute's 22nd Annual Economic Summit, he announced that not only HARP, but also the Home Affordable Modification Program (HAMP) would be extended until Dec. 31, 2016 (for the umpteenth time).
The Obama administration's signature efforts to keep troubled homeowners from going down in flames during the economic conflagration, HARP allows borrowers with just a tad of equity--or no equity at all--to turn in their high-rate mortgages for loans with lower, more affordable rates. HAMP uses funds from the Troubled Asset Relief Program (TARP) to pay lenders to modify loans of distressed borrowers, again making their payments more affordable.
"Although the number of new borrowers entering these two programs continues to decline, in part because many eligible borrowers have already taken advantage of them and in part because of recovering housing prices, lenders and servicers are continuing to approve new HAMP modifications and HARP refinances," Watt said at his speech in Los Angeles. "Extending HAMP and HARP through the end of 2016 will provide real relief for borrowers who continue to face challenges either paying their mortgages or refinancing."
Will the programs be extended again to 2017? 2018? Stay tuned.
Speaking of extended, in a speech to the National Association of Realtors[R]' (NAR's) midyear Legislative Meetings & Trade Expo in May in Washington, D.C., RICHARD CORDRAY, director of the Consumer Financial Protection Bureau (CFPB), left the window open--but only slightly--to the possibility that the then-Aug. 1 deadline would be extended for implementation of the newly combined HUD-1 and Truth In Lending forms.
NAR is the latest in what is now a lengthy list of industry groups, including the Mortgage Bankers Association (MBA), that have expressed concern that key players are still not ready. Realtors, in particular, are worried that closings could be delayed by as many as 40 days because lenders and title...