Last weekend, Fannie Mae and Freddie Mac updated their automated underwriting systems (AUS) respectively known as DU and LP to allow expanded loan to values and other improvements to their guidelines. Many Washington home owners have been anxiously waiting (along with mortgage originators, like yours truly) for the expanded guidelines to be available.
It appears that HARP 2.0 has hiccups. Expanded guidelines are not being fully released to mortgage originators. Banks continue to have their overlays for Fannie Mae DU Plus and Freddie Mac Relief Open Assess HARP refinances, restricting what other lenders can do to help home owners. This is especially frustrating when banks/lenders are reportedly outsourcing many of their clients to large internet lenders with mostly inexperienced mortgage originators. Why these large banks would treat some of their clients as a "cold lead" instead of allowing consumers to have access to all lenders leaves me scratching my head.
I am constantly checking with the lenders I work with to see what's new with HARP guidelines. If you're reading this post, keep in mind that mortgage underwriting guidelines change constantly – what is published here, depending on when you read it, may be outdated. To stay updated, please subscribe to my blog (upper right corner). I'm also continuing to update my HARP 2.0 guide (button to the left).
Here's what I know, effective as of today, March 20, 2012 as of 8:30 am:
- HARP is allowing for more waived appraisals on both Fannie and Freddie programs.
- Waived appraisals may be available to 1-unit primary residence, investment property or second homes. It's not available to 2-4 unit properties. NOTE: not every home owner will qualify to have their appraisal waived.
- Currently, the banks I work with are limiting the LTV to 105% for the first mortgage. There are no LTV limits with second mortgages/HELOCs, however the second lien holder needs to agree to be subordinated or be paid off – it cannot be included in the new HARP refi.
- Private mortgage insurance: bank overlays (restrictions) are allowing us to go up to 95% LTV with a few allowing up to 105% LTV.
- Some private mortgage insurance companies are more agreeable than others with HARP refi's. If your existing pmi is with UGIC, your HARP refi may take months.
I'm hopeful that banks will pick up the pace and update their overlays so that HARP is more widely available to home owners while mortgage rates are still low. I am told by the banks we work with that updated guidelines are coming soon.
I will continue to keep you posted!
If you would like me to provide you with a HARP 2.0 refi quote for your home located in Washington, click here.
2:30 pm UPDATE: I'm already hearing that some of the banks we work with will begin releasing HARP to us possibly later this week. Stay tuned!