Okay, so the government has finally decided that HARP 2.0 (Home Affordable Refinance Program) is a good idea and should get off the ground. If you remember the politics behind it you know what a beating the government took just to get that much. Well, not surprisingly the 4 biggest mortgage servicers are squarely behind the program. If you’re not sure why, then maybe you haven’t been paying enough attention these past few years.
Basically, no matter how you slice it the big banks are able to scam the system. No matter how pure the motives of a program might be (refinancing for lower interest rates, short sale incentives, deferments, etc.) the banks still find a way to turn it to their advantage. And why shouldn’t they? They’re not in the business of serving customers, they’re in the business of making money.
Now, the government that is trying to regulate them, it’s not so clear what business they’re in. I mean, are they out to protect the homeowners or the banks? Aren’t banks afforded the same protections as everyone else? Don’t homeowners need help making their payments due to how badly the banks screwed up? It’s a fine line for politicians to walk especially since they’re all looking to get reelected.
I’m really excited to see how this one plays out. Someone set a reminder for 6 months from now to check back in on what I’m saying here. In six months or less it’s going to come out that all major banks have found loopholes to deny homeowners refinancing when it suits them and somehow get loads of free government money that was intended to help struggling homeowners. You’ve seen it happen time after time so please remember that you saw this one here first. The banks will figure out how to do it. Well, they’ll figure it out faster than Washington anyway.