HARP 2.0 is hot – or so we keep hearing. Late last year the Treasury Department finally found the keys to the HARP kingdom: take the loan-to-value ratio girdle totally off the patient and see what happens. Well it worked and certain mega banks are doing nice volumes – but not all. We’re told a handful of entrepreneurial-minded nonbank lenders are gearing up to be ‘private label’ funders of HARP 2.0 mortgages. The whole process, of course, has been aided by Fannie Mae and Freddie Mac finally updating their automated underwriting platforms to handle the new product. But will increased competition in the HARP arena drive down the so-called rich profit margins? We shall see.
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