Obama "No more red tape. No more runaround from the banks"

With about 10.7 million U.S. borrowers, roughly 22 percent, of all outstanding loans underwater, the Obama Administration has declared that banks should cover the cost of a (new version) mortgage refinancing plan, "because they helped cause the crisis."

Three months ago, the White House loosened requirements on a federal effort, called the Home Affordable Refinance Program, or HARP, to make it easier for underwater homeowners with government-backed loans to lock into mortgages at lower rates. Cutting costs for borrowers whose mortgages are backed by government-run housing finance giants Fannie Mae and Freddie Mac, the new plan would be open to all borrowers who are current on their payments.

The Home Affordable Refinance Program, aka HARP 2.0, is a program to help underwater borrowers refinance to lower current rates.  HARP 1 was announced in March 2009, allowing borrowers up to 105 or 125% of amount owed to current market value.  But, less than 900,000 home owners have taken advantage of this program.  So President Obama announced an 2.0 version of the HARP program, with the hope of reaching more underwater borrowers.  The HARP 2.0 program essentially removed the 125% cap for the amount being underwater to unlimited.  The program took effect in Dec. 1, 2011 with only bank servicers allowing refinance until Fannie Mae can update their software to allow non-servicing lenders to originate these loans, expected by March 2012.