#MyRefi - HARP 3 Social Media Campaign
Editor's Update - March 2013: Thanks to a reader's comment (h/t Jay B.), it has been brought to our attention that the White House has updated its #MyRefi Page and Tool. The thrust of the program is now on Fannie Mae and Freddie Mac loans only. When the #MyRefi campaign was launched in August 2012, it aimed to open up refinancing at the low rates available to distressed borrowers without a government backed mortgage, who were unable to qualify for a HARP mortgage or other existing program. Based on how the White House page is currently structured, apparently President Obama is focusing his efforts on trying to get the Boxer-Menendez plan passed through Congress.
The White House rolled out #MyRefi, a new social media program to promote the Obama Refinance Plan using Twitter, Google+, e-mail, and Facebook.
As explained in the official White House blog, underwater borrowers can save significant amounts of money if Congress acts and implements a broader refinance program, expanding beyond the current programs that exist for borrowers with Fannie Mae and Freddie Mac loans.
#MyRefi aims to build public support for the President’s proposals and increase pressure on Congress to put the proposals into law.
White House Refi Page and Tool
On their Refi page the White House offers you a tool that shows the type of loan program you could qualify for, if the #MyRefi program becomes law. The thrust of the program is on increasing refinances of the Fannie Mae and Freddie Mac loans. It is not clear as to which law the White House is referring to, nor the eligibility requirements for the proposed refinance program. The number of overall potential borrowers is not clear, as the page does not address the issue of a cut-off date.
Original Proposal: The basic criteria for the program as introduced in the original #MyRefi proposal are that:
- You have a private loan (your loan is not backed by Fannie Mae, Freddie Mac, FHA, or USDA).
- You are refinancing the mortgage for your primary residence.
- Your mortgage is less than $750,000.
- You made your payments on time the last 6 months and have no more than one 30-day late payment in the past 12 months.
- Your Credit score is above 580.
President Obama’s refinance plan calls for a simplified application process, with no appraisals, no tax forms and less red tape. This plan is similar to the HARP 2.0 mortgage done through a manual underwriting process (which is available only to HARP borrowers through their original lenders), but extends the program to more underwater borrowers.
#MyRefi: Why a HARP 3 Mass Refinancing Program
There are varying estimates of the number underwater homeowners, ranging from 11 million to 17 million borrowers. The current HARP 2.0 plan is limited in scope, since it only addresses borrowers with Fannie Mae and Freddie Mac loans.
The White House, on their #MyRefi page lists five important points about the Refi plan, as follows:
- Interest rates are at historic lows; currently less than 4%.
- Borrowers can save about $3,000 per year.
- The plan is simple to operate and even underwater borrowers can benefit.
- The economy will benefit by helping millions of borrowers save money; however, it will take Congressional action to enact the program.
- The cost to the taxpayers is zero.
#MyRefi — Will HARP 3 Happen?
Although the White House makes their Refi plan seem simple, the actual implementation of a wide ranging refinance plan is complicated. Some of the problems are:
- Gaining enough political support for more government involvement in the housing and mortgage market. The program calls for a transfer of wealth to investors of private based mortgages to the current homeowners. (If the homeowner is not underwater, then they can refinance their loan).
- Working out the technicalities relating to purchasing the loans. Who will fund the money? Who will guarantee the loans?
- Working out the underwriting criteria and eligibility requirements.
We have watched as the HARP 1.0 program evolved into the HARP 2.0 program. More borrowers were eligible, due to less stringent credit and LTV requirements. Still, many underwater borrowers have been unable to qualify for HARP 2.0. They are waiting for various HARP 3.0 programs such as the Menendez-Boxer Responsible Homeowners Refinancing Act of 2012, which is scheduled for debate in September 2012.
While it is not a certainty that President Obama’s mass refinance plan will be implemented, in the meantime the #MyRefi campaign is looking to build mass support from the American public.