The Government just passed changes to the HARP (Home Affordable Refinance Program). I've written articles about this in the past many times. However, today I play Devil's Advocate. Who is this program supposed to help? This current administration keeps shouting from the highest mountaintop that it champions the little guy. However, the way I see it this program may only help the people who don't really need the help.

One of the major guidelines of the HARP is that you must be current on your mortgage for the last six months and you can only have one late payment (30 days) within the prior 12 months. So if you are paying and have been paying your mortgage on time, you can benefit from this program. It doesn't really matter what your house is worth or how under water you are in relation to your home's value. This doesn't really help the people who are struggling or facing foreclosure. In fact, this program just helps to ensure that if you are paying on your house, you won't simply walk away because your payments will decrease.

IS it a wise financial move? If your house has depreciated enough for you to qualify for the Home Affordable Mortgage Program, maybe you should think about walking away. Many people are doing it, that's for sure. But if that is not an option for you, then HARP is a good solution for you, here's why:

You will now be able to lower the amount of interest that you pay on your mortgage per month. Since you have not gone late, you obviously can afford to pay whatever your mortgage payment is. That said, if you continue to pay what your mortgage payment is currently, but lower your interest rate, all of that interest that you were previously paying will be applied to the principle of your loan. Thus you will be rapidly decreasing the term of your mortgage by manually manipulating the principal reduction.

So what have I said? I don't think that the government is helping anyone but themselves with this program. I think that they are trying to prevent default by many borrowers who probably wouldn't have defaulted anyway. However, if they are feeling like giving away handouts, why not take them? I mean if you have been paying on time, then you deserve a break anyway. Take advantage of the change and lower your interest rate. Rates are at Historical lows so now would be a great time to refinance.