HARP plan keeps mortgage insurers in play
The Mortgage Insurance Companies of America is supporting the revised Home Affordable Refinance Program as a step in the right direction since it aims to keep borrowers current while reducing default claims. Earlier this week, the government announced a revamped HARP plan that will refinance more underwater mortgages. The plan also will waive reps and warrants, making it easier for mortgages to transition to lower interest rates without buy-back risk coming into play. This also makes it easier for insurers to back the risk. "No MICA member will institute any additional requirements on HARP loans beyond the GSEs’ program requirements, aligning with their common guidelines," MICA said. "The industry will continue to collaborate with the GSEs, lending institutions and servicers to further streamline the operational processes. To advance the reach of the program, private MIs will relieve lending institutions of representations from the original loan files." "The HARP extension will enable creditworthy borrowers to remain current on their mortgage payments and minimize foreclosures, which is good for individual families and communities," said Suzanne Hutchinson, executive vice president of MICA. "The private MI industry has and will continue to be a key player in the housing recovery." United Guaranty, the mortgage insurance subsidiary of AIG, said the firm is already preparing for increased activity with the HARP plan now on the table. "United Guaranty is working with servicers to further streamline our processes to make sure that servicers have the capacity to handle the anticipated increase in refinancing requests under the revised HARP plan," said Brian Gould, senior vice president of loss management with United Guaranty. Gould said United Guaranty is already allocating time and resources to support the home retention goals of HARP. "We currently have two shifts of employees in place to help homeowners understand their options under home retention programs such as HARP," Gould said. Write to Kerri Panchuk.