Consumers are going to their local banks, calling Mortgage Brokers and searching the web looking for information on the Obama administration's latest attempt to help struggling homeowners; the HARP refinance program or Home Affordable Refinance Program. Changes to the former HARP program were announced in October and were supposed to take effect on November 15th. The largest change deals with the LTV (Loan to Value) Restrictions of HARP 1.0. In it, a homeowner had to have a loan that was owned by Freddie Mac or Fannie Mae and their first Mortgage balance could only be 105 percent of the overall value of their home. If there was a second mortgage, then the culmination of the two loans could only add up to 125% of the value of their home. In HARP 2.0, the LTV restriction of the first mortgage has increased to 125 percent and there is no ceiling if you have a 2nd mortgage. However, most homeowners are confused about this. Most people think that there is no LTV restrictions and, consequently are disappointed when they walk into their bank only to discover that their home is too far under water to qualify for the plan.

This is not the only problem that consumers are running into. Most of the people seeking out a HARP refinance took their loans out from 2005 to 2008. A common factor on loans given at that time was Mortgage Insurance or PMI. If there is the presence of Mortgage Insurance on a Mortgage, chances are that the only way to get it done would be to go through the original mortgage company. Because there are several Mortgage Giants who have gone out of business, many consumers are stuck holding the bag, unable to take advantage of HARP. For example, if a homeowner originally obtained a loan through Quicken loans and their loan has Mortgage Insurance attached, they cannot refinance because Quicken Loans no longer services loans and a new lender would not accept the Mortgage Insurance Certificate from their current loan. Additionally, because lenders have the option of whether or not they want to participate in the plan, many lenders are deciding not to adopt some of the major provisions of the plan.

Clients who are currently with Mortgage giants like Bank of America and Wells Fargo are finding themselves in interesting positions because of the companies' interpretations of the plan as well. Wells Fargo is not raising their LTV requirements. They don't seem to be very interested in changing the way that they do business currently. Bank of America recently transferred thousands of their Mortgages to Greentree Financial and several calls to Greentree by former Bank of America clients are being met with denials because of licensing issues in several states.

There are many things that need to happen to HARP in order for it to be more far reaching and helpful to more Americans. First, the Mortgage Insurance Restriction needs to be lifted. It is understood that in the event of default, the Mortgage Insurance guarantees that the servicer will be reimbursed, but if the original loan is paid off by a loan that is eventually bought by fannie Mae or Freddie Mac, what is the difference?

The other restriction that needs to be changed is the LTV requirement. There are far too many homes in America that have depreciated greatly, pushing the Loan to Value over the 125% range aloted for in the HARP program. If the program is trying to help homeowners who have been ontime with their mortgage payments, then what is the difference how far under water the home is?

There are Mortgage Professionals who know their way around some of these HARP restrictions. If you have been turned down by your local bank or current lender, don't give up hope. Look around. There is a good chance that the person who denied you did not have a full understanding of the HARP guidelines. After all, it is a new program with many different nuances. Every investor has their own version of the HARP program. What one lender won't do, might be common practice for another. There are many lenders who have access to a vast database of investors. Find the right one and you may be able to refinance into a new mortgage with an historically low interest rate.