HARP on Housing

There has been increased interest and speculation on whether the government will push forward another iteration of its Home Affordable Refinance Program, dubbed HARP 3.0. 
HARP 1.0
In 2009, HARP (now commonly referred to as HARP 1.0) was launched as part of the larger economic stimulus package put forward by the administration and Congress. The general provisions of the program were to allow homeowners with either Fannie Mae or Freddie Mac backed loans, originated prior to May 31, 2009, to refinance to lower rates (at the point the 30 year rate had dropped below the 5% mark), regardless of whether the loan exceeded 100% of the property value, i.e., underwater, so long as the final loan to value (LTV) didn't exceed 125%. The added advantage of this program was that loans without mortgage insurance already attached, could be refinanced without having to acquire mortgage insurance (MI) even if the new value pushed the LTV over the usual 80% threshold. During the first 3 years of the program, there were more than 1 million HARP mortgage closings, which amounted to billions of dollars of interest savings as a whole. 
HARP 2.0
The program was considered a success, so much so that in 2011 the government expanded the program (HARP 2.0) by lifting the 125% loan to value restriction contained in HARP 1.0. Additionally, some of the other hurdles attendant HARP 1.0 were relaxed or lifted, such as MI companies allowing MI certifications to be transferred to new lenders, or simplifying the process by which loans can be refinanced and transferred to different lenders, which was causing particular difficulty with Freddie Mac backed loans. These changes resulted in a three fold increase in HARP refinances, which freed up billions more in just 12 months of the program. 
HARP 3.0? 
Obviously, such success has led to increased interest in expanding the program further, i.e., HARP 3.0. Some of the points being discussed are as follows: pushing back the cutoff date from May 31, 2009, which has remained in the current 2.0 iteration; allowing borrowers who have already used the HARP program (1 and done limit) to refinance again if they could further reduce their monthly payments. But perhaps the biggest potential change would be to open the HARP program to non-delinquent, non-Fannie Mae or Freddie Mac backed loans, such as balloon loans, interest-only loans, or even subprime loans. Some estimates indicate these loans could potentially number as high as 7.5 million mortgages. The economic affect of freeing up that much interest expense would be significant to put it mildly. Many economists have concluded that both HARP programs were instrumental in shoring up Fannie Mae and Freddie Mac, and helped to stabilize and even improve the trajectory of home values. The delinquency rates on HARP originated loans has been extremely low as compared to the historical average. In light of the overwhelming positive economic impact of the first two iterations of the HARP program, it seems an inevitability that some version of HARP 3.0 will soon be offered to current homeowners.