Despite Falling Mortgage Rates, March 2014 HARP Loan Closings Lowest Since Programs Launch

• HARP Mortgages

In late-2011, the Home Affordable Refinance Program (HARP) was made available to US homeowners whose mortgages were severely underwater. The program was a hit, and help homeowners to refinance.

At its peak, HARP loans for which loan-to-value (LTV) exceeded 125% accounted for more than 40 percent of all HARP loans closed. Today, however, with home prices rising, fewer homeowners need HARPs high-LTV option.

In March 2014, HARP loans over 125% LTV accounted for a paltry 12 percent of overall HARP closings. 

Get a personalized HARP rate quote here.

HARP : Refinancing For Underwater Homeowners

HARP is an acronym. It stands for Home Affordable Refinance Program. Sometimes called the Obama Refi, HARP was launched in 2009 as part of that years economic stimulus program.

At the time, current mortgage rates had been dropping sharply. Meanwhile, home values were doing the same.

In places like Los Angeles, California; Miami, Florida; and Phoenix, Arizona, homeowners witnessed 30-year fixed rate mortgage rates dropping to the 4s. However, because these homeowners had little or no equity left in their properties, there was — quite literally — nothing they could do to benefit from low rates.

Thats when the Home Affordable Refinance Program was first proposed.

As part of its economic stimulus programs, the government was promoting the idea that if underwater homeowners could just get access to a refinance, they would be able to lower their monthly mortgage payments, thereby increasing household cash flow, and boosting consumer spending which would help propel the US economy recovery.

HARP mortgage guidelines instructed US banks to ignore a homeowners specific home equity for a refinance and, instead, to focus on a homeowners other loan traits, such as its history of on-time mortgage payments.

Headlines read Obama Waives Refi Requirements. US homeowners jumped on the program.

HARP 2 : Removing 125% LTV Restrictions

HARP was originally meant to reach 7 million US homeowners. However, through the programs first two years, it had failed to reach even one million households. The government determined that there were two key reasons for the shortfall.

The first reason HARP was falling short was because the government was asking banks to underwrite loans for the Home Affordable Refinance Program, but then holding them responsible for due diligence errors made on the loan prior to the refinance.

For example, if Wells Fargo was giving a HARP loan to an existing Bank of America customer, Wells Fargo would be accountable to Bank of Americas original home loan approval, plus any errors, omissions, or traces of fraud which occurred on the original underwrite.

Rules like that will scare a bank so, as a result, few lenders gave HARP access beyond their existing customers base. These loans came to be known as same-servicer HARP loans. The lack of cross-servicer loans hindered HARPs progress.

The second reason HARP was falling short was because program guidelines restricted HARP loans to homes with LTVs of 125% LTV or less. This was restrictive to homeowners in hard-hit states such as Nevada and Florida whose negative-equity positions were much greater than 125% LTV. 

Some homeowners had LTVs as high as 300 percent.

So, in November 2011, as an effort to make HARP better, the government re-released the Home Affordable Refinance Program as HARP 2.0.

The main changes for HARP 2.0 were two-fold :

1. Indemnify new mortgage lender from errors made by original mortgage lender
2. Remove the loan-to-value restrictions so 125% LTV was no longer a limit

The changes gave US homeowners access to unlimited LTV loans which could be handled by any HARP-participating lender. Since the program update, HARP volume has tripled. More than 3 million HARP loans have closed since the programs inception.

The need for ultra-high LTV loans is waning, however.

Get a personalized HARP rate quote for your home.

HARP For LTVs Over 125% Lose Market Share

HARP 2.0 launched in November 2011 and, by June 2012, loans over 125 percent LTV accounted for more than 40% of total HARP volume.

This would be the peak for ultra-high LTV HARP loans, though; a function of pent-up demand, falling mortgage rates, and stagnant US home prices.

Since June 2012, with home values rising as much as 25% in some US markets, requests for HARP loans over 125% have steadily dropped. The reduction since last summer has been swift.

• March 2013 : 21.8% of all HARP loans were for LTVs over 125%
• March 2014 : 12.4% of all HARP loans were for LTVs over 125%

Demand for ultra-high LTV loans is decidedly lower as compared to last year.

Rising home values are diminishing the need for HARP loans over 125% LTV, a trend which will likely continue through 2014, and into 2015 when the Home Affordable Refinance Program is slated to expire.

HARP concludes December 31, 2015. There are no plans to extend HARP currently.

Get HARP Mortgage Rates

The HARP mortgage program has fewer than 2 years left in its life, but thats still plenty of time to weigh your options and apply for a loan. Plus, with mortgage rates at a one-year low, market conditions are favorable for all  homeowners to save money each month.

The typical HARP homeowner saves more than 27% on their mortgage payment monthly. See how HARP can help you. Get started with a rate quote today. Rates are available online at no cost and with no obligation. Your social security number is not required to get started.

Click here for todays rate quotes.

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Northern Dynasty accepts more mining claims near Pebble

June 6th 6:52 pm | By Dave Bendinger

In May, an agreement was finalized transferring 199 state mining claims on the Big Chunk Super Project site from Liberty Star Uranium amp; Metals to Northern Dynasty, the sole owner of the Pebble Mine project north of Iliamna.

Along with 95 mineral claims transferred in 2010, Northern Dynasty now owns 294 claims on the Big Chunk copper and gold deposit, which lies a few miles north of Pebble.

The transfer settles a 2010 cash loan from Northern Dynasty which Liberty Star was never able to repay.

The deal began when Northern Dynasty staked Liberty Star $1 million in cash in return for the direct purchase of 95 Big Chunk claims. Liberty Star put the 199 claims up as collateral for an additional $3 million loan from Northern Dynasty.

When Northern Dynasty called for repayment of that loan in the fall of 2012, Liberty Star was bound to transfer the remaining claims in lieu of the cash payment. With interest, the balance of the loan had risen to $3,730,174.

The deal was put on hold, however, by another company also owed money by Liberty Star. MBGS, LLC, an Alaska-Native owned contracting firm had put a lien on the 199 claims after alleging Liberty Star had failed to pay some $320,000 for services provided during the drilling season of 2012.

MBGS, LLC filed suit against Liberty Star in December 2012. The lawsuit was settled in March 2014, when Liberty Star agreed to give MBGS 1 million shares of company stock and all of the equipment and property at the camp site.

When the lien was removed, Liberty Star was able to transfer the 199 claims to Northern Dynasty to satisfy the loan terms. Their agreement was signed May 12.

There are other signs that Liberty Star, an exploration stage mining company based out of Tucson, Ariz., is in poor financial shape. A 2013 year-end statement filed in May reports the company had only $55,089 cash on hand, and had a net loss of $2,318,047 for the 12-month period ended Jan. 31, 2014. The company reported a net loss the previous year of about the same amount. It continues to borrow heavily, and its stock price is trading at just over $0.01 per share.

According to a December 2013 press release, Liberty Star has dumped all but 54 mineral claims (12 square miles) at Big Chunk. Just a year prior, the company held 612 state mining claims (177 square miles) at the site, and was continuing geologic work to try and prove the deposit was perhaps similar in scope and value to Pebble.

The company says it has reduced all land that previous studies confirm lack anomalies for porphyry copper deposits, and that the remaining 54 claims are directly centered over the promising anomalies.

In that December release, CEO Jim Briscoe said the problems that have caused Anglo American to withdraw from the area were similarly bad for Liberty Star, and that the money that would have been used for holding costs on the dumped claims will be used to shore up other prospects in Arizona.

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Local secondhand shops will now have to keep new purchases for 10 days before putting them out for sale, giving police more time to track stolen goods.

The Kokomo Common Council amended the ordinance Monday for pawnbrokers and secondhand dealers in the city in an effort to comply with updates to state laws. Previously, Kokomo’s ordinance required that items be retained for 24 hours.

The changes are meant to give police more time to investigate and discover stolen goods that are sold at pawn shops or other secondhand stores.

All goods or articles sold at any licensed pawnbroker, secondhand dealer, precious metals or stone dealer must now be retained at their place of business for 10 days after the transaction has been electronically transmitted to the Kokomo Police Department before they can be sold.

Local law enforcement uses online databases like Leads Online, which tracks pawn shop purchases with important and pertinent information in real-time, to find goods that have been stolen.

Kokomo Common Council member Kevin Summers said the state’s switch from a five- to 10-day waiting period will allow those who have had items stolen more time to report the theft.

“There’s no real magic number, but 10 days gives you a full couple of weeks. If you’ve been on vacation and your house gets broken into, there are a couple of days to handle that,” he said.

In addition to a longer waiting period, a clear photograph of each article, capturing characteristics like serial numbers, names, letters, special features or other unique identifying marks, must be preserved electronically through a computer data system as stipulated by the Kokomo Police Department.

Cash Loan amp; Security Inc. co-manager Deb Hickey said her business at 501 S. Reed Road has not taken photos with incoming merchandise in the past, so there will be a learning curve of sorts with the changes.

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