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STATEMENT: CAP’s Wartell on New HARP Guidelines to Help Struggling Homeowners

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Contact: Katie Peters
Phone: 202.741.6285

Washington, D.C. — This week, Fannie Mae and Freddie Mac released details about the expanded Home Affordable Refinance Program, or HARP, originally announced by FHFA last month. The proposed changes are designed to increase the number of underwater borrowers able to refinance their mortgage through HARP at today’s historically low rates.

Sarah Wartell, Executive Vice President of the Center for American Progress, issued the following statement:

When more borrowers can refinance their mortgages at today’s low interest rates, it is good for the consumer, good for the government-sponsored enterprises, good for the taxpayer, and good for the economy. The guidelines released this week move things forward but we remain concerned that a few details may still present unnecessary barriers to beneficial refinancings.

We welcomed last month’s announcement and eagerly awaited the important details just released which will determine how much progress will actually be achieved. We are pleased to see changes that will eliminate the loan-to-value cap for refinancings so more underwater borrowers can participate; extend the program’s duration another year; change Freddie’s underwriting standards to match Fannie’s to allow on delinquency in the prior 12 months; reduce the maximum price adjustments on high loan-to-value loans (although not eliminate these all together); and ease some of the liability for representations and warranties that have proven a major barrier to servicer participation.

We have concerns, however, about the different rules for Fannie and Freddie refinancings and that the representation and warranties relief will not be enough—especially for nonsame-servicer refinancings—to encourage competition between lenders.

To speak with CAP experts on the issue, please contact Katie Peters at or 202.741.6285.


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