Zillow, FHFA Team Up To Clarify HARP

Zillow and the Federal Housing Finance Agency (FHFA) teamed up to respond to underwater homeowners confused about the Home Affordablehome-in-hand Refinance Program (HARP). Meg Burns is the senior associate director for housing and regulatory policy for FHFA and she joined Zillow for a Google+ Hangout session to provide clarification of HARP’s fine print.

Burns reiterated during the session that HARP has no minimum income or credit score requirements. That said, different lenders may have their own criteria.

“It’s a very streamlined product, which means lenders don’t do traditional underwriting. They don’t assess the borrowers’ income amount nor look at the credit report,” she said. “Most lenders really like that feature of the product because it makes it much easier for them to qualify a borrower for participation.”

Borrowers are instead required to have a solid payment history with no missed payments in the six months prior to refinancing and only one missed payment in the 12 months prior.

“One of the great things about HARP is, if you continue to make payments on time, you ultimately will meet the payment history requirement,” Burns remarked. Another large change to the program is the elimination of the original HARP’s 125% ceiling on loan-to-value (LTV) ratios.

Burns finally addressed one realtor’s question about doubtful advice offered by some companies to struggling borrowers. She notes, “Don’t ever go delinquent on your mortgage if you want to qualify for a program. It’s highly likely, for one thing, that you’ll be rejected anyway, and it’s really bad for your credit score.”

FHFA and Zillow are also teaming up to create a HARP-specific blog aimed to answer questions about specifics of the program and to continue to offer advice to distressed borrowers.