Survey Says….?
On Thursday, November 24 (the same day that you were setting the table and basting the turkey), I was checking out an interesting article in the San Diego Union Tribune.
In this article, eleven local and well-respected folks in the field of real estate were asked the following question, “Do you believe the revamped HARP rules will significantly improve the San Diego Housing Market?”
Before I share their responses, let me review the details of the HARP 2.0 program. This is new and improved underwater refinance program where underwater responsible borrowers (with 11 out of the last 12 payments made on time) with loans owned by Fannie Mae or Freddie Mac may have the opportunity to refinance their loans at prevailing rates. Applications for this program can be made effective December 1, 2011, however Fannie Mae and Freddie Mac will not have their online underwriting systems available until February or March of 2012.
In theory, it sounds like a good program, but what does the survey say?
- Paul Barnes, Shea Homes San Diego: No
- Murtaza Baxamusa, Family Housing Corporation: No
- Kurt Branstetter, WJ Bradley Mortgage: No
- Clemente Casillas, South County Real Estate: Yes
- Rick Hoffman, Coldwell Banker: Yes
- Patricia Kramer, Prudential California: No
- Michael Lea, Corky McMillin Center for Real Estate: No
- Alan Nevin, London Group Realty Advisors: No
- Amy O’Dorisio, Ascent Real Estate: No
- Robert Vallera, Grubb & Ellis: No
- Kurt Wannebo, San Diego Real Estate and Investments: No
So, in the style of the famous Family Feud host, Richard Dawson, I ask, “Will the HARP program improve the housing market?”
Survey says….No.
It does sound like a great program, but it seems that for many it is too little, too late.
Short Sale Expeditor
{ 2 comments… read them below or add one }
I built a spreadsheet to better analyze the benefit of doing a HARP 2 refinance vs. short selling, renting for 3 years, and re-purchasing. It’s very helpful.
Will it help the local market? If it stops people from strategic default, how can it not help?
I guess we all have a different definition of what an improving housing market is or looks like.
The loan applications we have accepted so far for the unlimited LTV HARP 2 refinance shows most people saving $300 to $600/month. Some people are choosing to refinance out of their 5-6%+ fannie/freddie loan into a 15 or 20 year loan (much lower rate) and build equity much faster, save a ton in interest, and in many cases, the payment doesn’t increase compared to what they pay now.
Others are comparing the two programs (HARP refi vs short selling) and deciding that no amount of payment relief is worth keeping a home that is 150% upside down in value and just walk away (short sale) and start over.
I think it all depends on the short and long term plans of the home owner and what their immediate needs are.
Are they OK with a short sale ding on their credit?
Are they OK with refinancing into a lower payment but still needing to wait 5, 7, 10 years before they get back down to 100% loan-to-value?
Brad… you will be crowned king of Harp
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