The new HARP 2.0 was designed to help those people who are considered “underwater” regardless of how far in value their homes have gone. About 90% of those who qualify have not taken advantage of the opportunity to refinance at these lower rates, so President Obama recently announced a rehaul. The Home Affordable Refinance Program has just had a bill passed by the Senate that would help gain support by both government parties. This bill was centered around supporting those providers and borrowers who lent or purchased loans, respectively, before June 2009 who were qualified for the program.

The new program was designed for those who were able to refinance one or more homes. With more government-sponsored loans, there is more competition for an expanded HARP program to get more backing.

In implementing the new program, the original lender has to cosign through the terms of the Government-Sponsored Enterprise to show that the borrower can pay back the loan. But when the borrower chooses a new loan provider, the new bank has to abide by the GSE principles for the loan.

The Harp 2.0 program was a good original thought but results have not been as promising as planned, with smaller bankers still reluctant to refinance mortgages due to the government ambiguity of new rules and regulations. Having a loan that is unable to be bought makes the new program not very appealing to lenders.

Although large banks are also hesitant, they are participating in the program to gain the money from the original loans they lent. This program is still being tested out, but many have shown their lack of support for the ramped up version of the HARP program.