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URL:  http://boards.fool.com/even-harp-home-affordable-refinance-program-30526645.aspx

Subject:  Re: Freddie Mac Bets AGAINST American Homeowners Date:  2/5/2013  7:04 PM
Author:  crackdclaw Number:  124672 of 127777

Even HARP (Home Affordable Refinance Program) loans have failed to help the hundreds of thousands of American homeowners HARP was designed to help. Why? Because many homeowners have a 2nd behind an underwater 1st and the 2nd won't subordinate.

HARP loans are not where I generally do my originations, but over the past couple of years I've probably done 30 to 40 of these loans. My work colleagues do much more of these, and I'm familiar with the program. From what I've seen, not one HARP eligible loan originated had an issue with a 2nd trust lender refusing to subordinate. I would have guessed that the 2nd lender kind of had to go along on a refinance of a 1st thru HARP, but I don't know, and that would only be a guess. But I've not seen subordination of 2nds to be an issue.

Thus, homeowners are stuck in mortgage jail, unable to take advantage of historic low rates.

Those stuck in mortgage jail, or not being able to refinance to a lower rate, are more liklely people who unfortunately, and through no fault of their own, did not have their original mortgage sold to Fannie or Freddie. It could easily have been A paper at time of origination, but many mortgages were grouped and sold as Mortgage Backed Securities. Those homeowners are stuck because their loan is not owned by Fannie or Freddie, and are not eligible for government sponsored HARP program.

Guess what I find confusing is your stance on HARP loans. You like the idea of HARP, a government program to help existing homeowners? You would like to see the program expanded? Or, you're opposed to the role government is playing? Whatever the political side you fall on, there is no argument that the HARP program has helped hundreds of thousands of people who would not have been able to refinance (due to high LTVs) actually capture lower interest rates. At that same time, it's been a financial windfall for those in the mortgage industry, from originators to processors to underwriters. Truthfully, when the market froze in 2008/2009 I wasn't sure what kind of a living I would be making in the next few years, or even if originating loans would continue as viable employment. Government intervention did bring liquidity back into the marketplace. Some may argue it was the government programs that initiated the financial collapse of 2008, but I'm of the belief there was more than one player involved with that. What is certain, is that the U.S. government played a huge role, and still do, in supporting the housing market and mortgage industry.

Unless one is actually in the trenches, talking to homeowners and analyzing their situations, criticism of their circumstances is speculative at best and cruel at worst.

Here's a comment we can both agree on. You said it, and I agree with your statement, so were in agreement. Would you also agree that it can be applied to many situations outside of home loans? I've read some of your posts on other boards and it's clear you have no tolerance for those on welfare, collecting unemployment, or receipients of food stamps. Perhaps you need to get into those trenches and learn their situations, to build some empathy and understanding.
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