by Bill McBride on 3/18/2012 08:29:00 PM
Sunday, March 18, 2012
This is significant ...
Back in October, the FHFA announced some changes to HARP to allow homeowners with GSE loans and with negative or near negative equity - and who are current on their mortgages - to refinance into lower interest rate loans.
The key to this program for the lenders was that the lender was not responsible for any of the representations and warranties associated with the original loan (this is huge for the lenders). The elimination of Reps and warrants for the original loans applies to the automated Desktop Underwriter® (DU) (see Selling Guide Announcement SEL-2011-12)
According to Fannie Mae, the updates to Desktop Underwriter® were completed yesterday. Now lenders can use the automated system (and borrowers will now be able to apply for a "HARP 2.0" refinance with lenders other than the lender for their original mortgage).
I expect having the automated system - with the elimination of reps and warrants - will lead to surge in refinance activity.
Note: We will not see the increase in the MBA refinance index reported this week, because that was for last week. We will have to wait until the end of March to see if there is a surge in refinance activity.