- Bankruptcy or Foreclosure seasoning requirements have been eliminated
- Up to 60% debt-to-income ratios are now accepted on all HARP refinances
- Promissory Note date now used to determine HARP eligibility, prior to 5/31/09. Until recently it was based on when Fannie or Freddie purchased the loan.
- 0x30 Mortgage rating in last 6 months is required – previously it was no late payments for 12 months!
- Loans that currently have mortgage insurance are allowed!
- Unlimited LTV/CLTV on HARP owner occupied homes, 2nd homes and Investment properties
Improved HARP – Home Affordability Refinance Program… something that the Government got mostly right during the effort to assist homeowners that could not take advantage of historically low loan rates because their home values have dropped. Recent changes mean property owners should take a second look, specifically:
HARP 2 – underwater refinance program update … The program itself is in full swing – success if you have a Fannie Mae loan … a bit limited if you have a Freddie Mac loan. No change to the requirement that it only applies to loans sold to Fannie Mae or Freddie Mac prior to June of 2009. The HARP 2.0 program is designed to help those that no longer have 20% equity qualify for a refinance and benefit of historically low rates. In short, you have to be current on payments, and your loan has to be owned by Fannie Mae or Freddie Mac (not the same as who services your loan or where you make your payments). Generally that is going to be a conforming loan (below $625,500). Fannie Mae has a lot more participating lenders so is more successful thus far. Freddie Mac has fewer participating lenders so a bit more of a chore. Also, loans with existing mortgage insurance require a bit of care. Those are details we sort out for you … Rates are fabulous so it’s worth checking if you would benefit from a refinance to record low rates. HARP 3.0 for all those not covered by Fannie/Freddie is a pipedream. It would be really cool if the same benefit would be available for those whose loan is held by the major banks…. Not sure if it will gain any momentum given an election year … stay tuned as we are on it. Lending is hard … Good article that summarizes the current lending environment and why -despite Fannie and Freddie’s best intentions – their own actions make it cumbersome to get a loan these days … Basically Fannie Freddie and FHA may talk about loosening guidelines yet on the backside they are forcing lenders to buy back loans for minor technical infractions in underwriting. That causes lenders to adopt defensive lending and apply overlays to the underwriting process to make certain a forensic review done months and years later will not result in a loan being rejected by Fannie or Freddie. Hopefully if the federal agencies ease their buyback demands, we could see an improved lending environment soon.
Fannie Mae and Freddie Mac systems … all updated last Monday … but it is still “wait and see” for most underwater homeowners wishing to refinance their underwater mortgage. If your first loan is a Fannie Mae loan up to 125% loan to value you are in decent shape and there are lenders ready to go. If your loan is serviced by Wells Fargo, and owned by Freddie Mac – Signet can do a new without restriction as to loan to value. Limited access to unlimited loan to value for Fannie Mae … still waiting on unlimited loan to value for Freddie Mac loan … that is still to be sorted out. The pricing, policies, and procedures for HARP 2.0 loans and the overlays and pricing are mind boggling! Listen to more details in this quick video update I did last week. Stay tuned – I will keep you posted as the program improves. If you would benefit from the refinance of an underwater property – start with an application and we will do the automated underwriting and be ready. It will be prudent not to be in too big a hurry to select a lender and formally submit. Once we can be sure of the best choice for you we can move it forward. What happened to rates? The Federal Open Market Committee minutes contained a surprise that impacted the bond market recently – indicating that the FED would drop their program to purchase long term bonds which they have been doing for some time … take a big purchaser out of the market and wham – rates jumped ¼% in a day or two. Plus continuing stock market gains have drawn funds from bonds into stocks impacting rates. A 30 year fixed loan at $417k is still between 4.125% and 4.25% (no cost) and a 15 year at 3.5% so rates are still very good. I do not see anything on the horizon to be pushing them back down.
HARP II or 2.0 is part of the Home Affordability and Refinance Program and will be a blessing for many homeowners wishing to stay in their home but have been blocked out from refinancing at historically low rates because of declining values. Available March 18th homeowners with a loan owned by Fannie Mae or Freddie Mac may be eligible. The primary expectation for Home Affordable Refinance is that refinancing will put responsible borrowers in a better position by reducing their monthly principal and interest payments or moving them from a more risky loan structure (such as an interest-only mortgage or a short-term ARM) to a more stable product (such as a fixed-rate mortgage), the refinance program will be working along with låne penger to make sure the services are given out correctly. Keys …
- Mortgage MUST be owned or guaranteed by Fannie Mae or Freddie Mac (find out HERE
- Current loan to value > 80%
- Borrower current on the mortgage (no late payments last 6 months, only 1 in last 12)
- No appraisal will be required (subject to lender overlays)
- Pricing penalties for investor, credit and loan to value are now capped
- Primary Residence, Investment and Second homes (1-4 units) are eligible
- Mortgage must have been sold to Fannie / Freddie prior to April 2009
HARP 2.0 is coming soon … expected March 15th once automated underwriting is updated at Fannie Mae and Freddie Mac. That should be a big help to homeowners that are underwater in their homes. If your loan is owned by Fannie Mae or Freddie Mac (different than who you make your payment to) you may be eligible for a market rate refinance – without an appraisal. Works for investment properties too! More on HARP 2.0 in the coming weeks. Stay tuned! If you have questions, call us at 925-364-4326
Fannie Mae and Freddie Mac announced details of the HARP 2.0 program on Tuesday as promised. Much was consistent with the original announcement … here’s a snippet of my thoughts on the program update and I really look forward to hearing your comments. Coming to you ‘live’ from Signet’s World Headquarters, Danville, CA with a slight overcast ! (Video fades in the beginning, but the message is complete!)
Good News! Funding for the required HECM (Home Equity Conversion Mortgage) Counseling has been restored. Those considering a reverse mortgage can now receive HUD counseling at no charge. This reverses a decision made last June when this critical funding was cut in a last minute budget compromise. Reverse Mortgage Daily: President Obama Signs Spending Bill, HUD Housing Counseling Funding Restored Through 2012
President Obama announced Monday, Oct 24, 2011 – an expansion of the HARP refinance program – extending benefits of a refinance to underwater homeowners! This is something that will help homeowners who previously could not refinance because of bad credit loans and low appraisal values. Listen to my comments below and either fax us your current Mortgage statements, complete the information below to find out if your loan is owned by Fannie Mae or Freddie Mac and is eligible … it does not matter who SERVICES your loan – only that the mortgage is owned by either Fannie Mae or Freddie Mac. Ask me how! If you’d rather pay back your nationaldebtreliefprograms.com in full, remember that there are other debt relief programs to help you do that and get your personal finances back on track. Enjoyed a nice week in Boston attending the National Reverse Mortgage Lenders Association’s conference. Some highlights will be shared in a future post. Once again, anything to do with reverse mortgage education – I can help! Clay Selland CPA, President Signet Mortgage Corporation