Oct 25, 2011
Reactions to HARP changes
25 Oct 2011
Posted by Andrew Kantor
Obama: It’s one step, not a fix:
These steps I’ve highlighted today will not solve all the problems in the housing market. Given the magnitude of the housing bubble, and the huge inventory of unsold homes in places like Nevada, it will take time to solve these challenges,” Obama said. “We will still need Congress to pass the jobs bill – and even then, the housing market won’t be fully healed until the unemployment rate comes down and the inventory of homes on the market comes down.”
Keefe, Bruyette & Woods analysts: It will only affect a small portion of the market:
While some potential changes, such as a waiver of reps and warranties on HARP loans, could be meaningful in terms of raising HARP volume sharply, the numbers are still likely to be small relative to the mortgage market as a whole.
Barclays Capital analysts: Actually, more loans are eligible than you might think:
The administrations estimates are much lower than [the numbers we calculated]; we believe the overall number could be higher, given the substantial effect of putback waivers.
Mortgage Bankers Association: Give it time:
While ultimately helpful, these changes are not going to be a silver bullet to solve all the issues facing our housing market and borrowers who owe more on their mortgages than their homes are worth. But they will offer lenders another tool to help borrowers and hopefully help bring some stability to housing markets, particularly those most impacted by home value declines.”
Moody’s Analytics: 1.6 million borrowers could be eligible.
HUD: It amounts to a $2,500/year tax cut, based on average savings of borrowers who take advantage of HARP.
Aristar Funding Corp.: Even 1.6 million people putting $2,500 a year back into the economy won’t help:
Refis do not create jobs. New home purchases do, and for that to take place the administration needs to focus 100% of its economic time and money on creating an environment conducive for hiring.”