Home Affordable Refi aka HARP 2.0 Phase 1

November 30, 2011 by Leave a Comment

Fannie Mae and Freddie Mac' s Home Affordable Refi enhancements will be released in phases with the first version of HARP 2.0 becoming available tomorrow, December 1, 2011.  The next phases will allow for expanded loan to value requirements and pricing enhancements. Fannie Mae will have an update to their selling guide in mid-December (so more information to follow).  Freddie Mac and Fannie Mae plan on having their underwriting system (DU and LP) updated on or before mid-March 2012. I will continue to keep you posted as we learn more information.

Here's my recommendation for Washington area home owners who may be eligible for a Home Affordable Refinance:

  • You can apply for HARP 2.0 tomorrow, December 1, 2011.  
  • We should be able to determine whether your loan qualifies based on the current "phase" available.  We are able to re-run your scenario during the next phase of HARP, if needed.
  • Loan to values under 80% may not qualify for the new Home Affordable program but you may still be able to take advantage of today's lower rates. 
  • Some of my refinance clients have already had their appraisals waived with their Fannie-to-Fannie DU Plus refinances. 
  • Unless you have an owner occupied or second home and are opting for an amortized mortgage of 20 years or less, the pricing difference with HARP 2.0 may not be that significant.
  • I'm happy to provide you with a Home Affordable Refi rate quote.

Here are some pointers on what you can do to prepare for your Home Affordable Refinance. 

I'm still waiting to hear from all of the private mortgage insurance companies to see if and how they will participate in this program.  We are also waiting to see how the lenders and banks we work with are going to treat this and if they've added layers of overlays to this program.  

UPDATE 12/15/11: If you qualify for a HARP refinance and have borrower paid private mortgage insurance, as long as the insurance can be transferred, we can help you. Lenders (secondary markets) and private mortgage insurance companies are working on allowing this for lpmi (lender paid mortgage insurance). More info on LPMI to follow. 

I am required to have the language below if I am soliciting your Home Affordable Refi for your home in Washington…and yes, I would love to help you with your HARP (or any) refinance:

Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance program (HARP) and you may be eligible to take advantages of these changes.  If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following websites: www.freddiemac.com/mymortgage or http://www.fanniemae.com/loanlookup/

If you have any questions about this or any mortgage program and your property is located in Washington state, I'm happy to help you.  I am only licensed to originate mortgages in Washington state.

Bottom line: we are still receiving (and waiting to receive) more information about the HARP 2.0 enhancements and bank/lender overlays.  However you can start your application on December 1, 2011 and "float" your rate, if needed.

Filed Under: Fannie, Freddie and FHFA, HARP - Home Affordable Refi, Refinance

2012 Conforming Loan Limits for Washington State Homes

November 27, 2011 by Leave a Comment

Congress decided to keep the 2012 Conforming Limits at the existing 2008 levels instead of reverting to the higher “temporary” limits that we’ve experienced the past couple of years**.  In their infinite wisdom, Congress did restore the higher loan limits to FHA insured loans.  This means that in order to not have a jumbo loan in the greater Seattle area, your loan amount will need to be $506,000 and lower for conventional or $567,500 or lower for FHA insured mortgages.  I’ll be officially posting FHA insured loan limits soon.  

Four counties in Washington continue to have “high balance” loan limits above the “general” loan limits:

King County, Snohomish County and Pierce County:

  • 1 Unit: $506,000
  • 2 Unit: $647,750
  • 3 Unit: $783,000
  • 4 Unit: $973,100

San Juan County:

  • 1 Unit: $483,000
  • 2 Unit: $618,300
  • 3 Unit: $747,400
  • 4 Unit: $928,850

The remaining Washington counties have “general” loan limits:

Adams, Asotin, Bention, Chelan, Clallam, Clark, Columbia, Cowlitz, Douglas, Ferry, Franklin, Garfield, Grant, Grays Harbor, Island, Jefferson, Kitsap, Kittatas, Klickitat, Lewis, Mason, Okanogan, Pacific, Pend Oreille, Skagit, Skamania, Spokane, Stevens, Thurston, Wahkiakum, Walla Walla, Whatcom, Whitman and Yakima Counties:

  • 1 Unit: $417,000
  • 2 Unit: $533,850
  • 3 Unit: $645,300
  • 4 Unit: $801,950 

Loan amounts above the figures listed above are considered “jumbo” or “non-conforming”. 

**NOTE: Congress DID increase loan limits in one county in Connecticut for 2012.

Filed Under: Fannie, Freddie and FHFA Tagged With: , ,

Freddie Mac HomeSteps offers NEW Buyer Incentives

November 23, 2011 by Leave a Comment

EDITORS NOTE: this post was written back in November 2011 – incentives may or may not be currently available.

Freddie Mac is sweetening the pot for qualified REO’s (Freddie Mac foreclosed homes) in Washington with their HomeSteps program.  HomeSteps SmartBuy provides buyers with a two year home warranty and up to 30% savings on new appliances.

What’s New? Freddie Mac is trying to warm up home sales with their Winter Sales Promotion.  Washington state has been added to this program!

Homebuyers may receive a credit of up to 3% towards closing cost for offers received between November 15, 2011 and January 31, 2012 that are closing on or before March 15, 2012. This is for owner occupied homes only.

Freddie Mac’s REO program, HomeSteps, is different than Fannie Mae’s Homepath. Fannie Mae offers special terms on their REO’s (foreclosed homes) however, Freddie Mac’s program is incentives for the buyer (no special financing programs).  Home buyers who are interested in buying a Freddie Mac HomeSteps property can use ANY type of financing, including conventional, FHA, VA or USDA.  

Click here for your rate quote for homes located in Washington State.

To see which homes are available for the HomeSteps program, you can search here. As of the publishing of this post, there are 53 Freddie Mac homes listed in Seattle; 209 homes in King County and 628 in Washington state.

If you are interested in buying a Freddie Mac HomeSteps property any where in Washington state and require a mortgage, I’m happy to help you!

Filed Under: Fannie, Freddie and FHFA, Homesteps Tagged With:

Announcing the New & Improved Home Affordable Refinance Program (HARP 2.0)

October 24, 2011 by Leave a Comment

We've been waiting to see what the "new Obama refi program" would be and this morning, the Federal Housing Finance Agency published a news release announcing new changes with the goal of reaching more borrowers. Home Affordable refinances are available to home owners who have a mortgage that is securitized by Fannie Mae or Freddie Mac on or before May 31, 2009. 

Here are some of the changes that are being made to HARP:

  • Removing the 125% loan to value ceiling for fixed rate mortgages. If refinancing into an adjustable rate mortgage there is a 105% cap.
  • Eliminating the appraisal where there is reliable AVM estimate available. Currently some Fannie Mae HARP refi's have qualified to have appraisals waived, it appears this may become more of the norm with HARP refi's.
  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and reducing fees for other borrowers;
  • Extending the end date of HARP until December 31, 2013 for loan originally sold to Fannie or Freddie on or before May 31, 2009 (note – the date a loan was sold to Fannie or Freddie is different than the date you closed on your refinance).

Borrowers must be current on their mortgage payments with no late payments in the past 6 months an do not have more than one late payment in the past 12 months.

HARP refinances are available for single family dwellings and condos as well as owner occupied, second homes and investment properties.

You DO NOT have to use your current mortgage servicer (who you currently make your mortgage payments to) for your Home Affordable Refinance unless you currently have private mortgage insurance. If your home is located anywhere in Washington State, I can help you with your mortgage needs.

If you have been turned down for a Home Affordable refinance because of a low appraised value and you otherwise qualified – this is your second chance!

More information is to be available by November 15, 2011.  Stay tuned!

UPDATE: Here are some tips for preparing for your HARP 2.0 refinance BEFORE you apply.

Filed Under: Fannie, Freddie and FHFA, HARP - Home Affordable Refi, Refinance

Conforming Loan Limits for Washington from October 1, 2011 until December 31, 2011

September 15, 2011 by Leave a Comment

With the revised conforming loan amounts only being in effect until the end of the year, I'm going to stick with limits listing single family dwellings.  Conforming loan amounts below are scheduled to be in effect from October 1, 2011 through December 1, 2011 and are listed by loan limit.

$506,000:  King County, Pierce County and Snohomish County

$483,000:  San Juan County

$417,000:  Adams, Asotin, Benton, Chelan, Clallam, Columbia, Cowlitz, Douglas, Ferry, Franklin, Garfield, Grant, Grays Harbor, Island, Kittitas, Klickitat, Lewis, Lincoln, Mason, Okanogan, Pacific, Pend Oreille, Spokane, Stevens, Thurston, Wahkiakum, Walla Walla, Whatcom, Whitman and Yakima Counties.

I'm hoping that home owners "stuck in the gap" of yesterday's higher loan amounts and the pending loan amounts may be able to refi with a Home Affordable refi or what ever President Obama has up his sleeve with the recent jobs bill…we're waiting to learn more information about his proposal.

Once I learn of the 2012 loan limits (typically around November), which Fannie Mae has hinted could be even lower than what you see here, I'll be sure to share that information with you.

Filed Under: Fannie, Freddie and FHFA

The Difference One Dollar Makes: Conforming vs Jumbo Rates

July 14, 2011 by Leave a Comment

This morning via Twitter, Talon Title asked me what the difference in rate is between a conforming and jumbo mortgage. Currently, as of October 1, 2011, the jumbo loan limit is set to be reduced unless Congress passes an extension.  In the Seattle area, the loan amount for jumbos will be anything over $506,000 (currently the loan limit is $567,500) for a single family dwelling. Ben Bernanke has stated that private banking will step in to finance these borrowers needing a mortgage over the conforming loan amounts…this is at a price.  He doesn't feel this will squeeze those borrowers out of the market.  I wonder if this will squeeze more buyers into adjustable rate mortgages.

Here's the difference in rates based on current pricing (as of 8:30 a.m. on July 14, 2011) with 740+ credit and an 80% loan to value.  We know the difference in the greater Seattle area between a jumbo and conforming rate will be $61,500 in down payment or equity.

Conforming loan amount of $417,000 or lower.

30 Year Fixed:  4.500% (apr 4.602).  

5/1 ARM: 3.000% (apr 3.292).  With 5/2/5 caps, this product is fixed at 3.000% for 60 months (P&I $1686) and then may adjust up 5% to 8.000% at the 61st payment (P&I $2744) or as low as 2.25% (P&I $1114). The rate will continue adjust up or down no more than 2% annually on the anniversary date and may never be higher than 8% or lower than 2.25%. Based on a $400,000 loan amount.

Conforming High Balance loan amount of $417,001 to $567,500 (for King County, Snohomish County or Pierce County).

30 Year Fixed:  4.625% (apr 4.602).  

5/1 ARM: 3.875% (apr 3.912).  With 5/2/5 caps, this product is fixed at 3.875% for 60 months (P&I $2379) and then may adjust up 5% to 8.875% at the 61st payment (P&I $3786) or as low as 2.75% (P&I $2102). The rate will continue adjust up or down no more than 2% annually on the anniversary date and may never be higher than 8.875% or lower than 2.75%.  Based on a $506,000 loan amount.

5/1 ARM: 2.875% (apr 3.231).  With 5/2/5 caps, this product is fixed at 2.875% for 60 months (P&I $2099) and then may adjust up 5% to 7.875% (P&I $3420)at the 61st payment or as low as 2.25% (P&I $1953). The rate will continue adjust up or down no more than 2% annually on the anniversary date and may never be higher than 7.875% or lower than 2.25%.  NOTE: 5% additional down payment (75% LTV) is required for this scenario. Based on a $506,000 loan amount.

Non-Conforming – Jumbo loan amounts $567,501 and higher (until October 1, 2011).

30 Year Fixed:  5.250% (apr 5.371).  

5/1 ARM: 3.875% (apr 3.904).  With 5/2/5 caps, this product is fixed at 3.875% for 60 months (P&I $2669) and then may adjust up 5% to 8.875% at the 61st payment (P&I $4246) or as low as 2.75% (P&I $2358). The rate will continue adjust up or down no more than 2% annually on the anniversary date and may never be higher than 8.875% or lower than 2.75%.  Based on a $567,501 loan amount.

Let's pretend that it's October 1, 2011 and that the changes to conforming loan limits are in place and somehow, mortgage rates are exactly the same as what I've quoted above.

The difference between the conforming high balance and jumbo rates are currently 0.625% in interest rate with the 30 year fixed mortgage. A loan amount of $506,001 or more (proposed future jumbo) would have a $193 higher mortgage payment with the jumbo rate over the conforming high balance based on rates above.

Are people going to stop buying homes that are in the current conforming high balance price range?  I don't think so… I do think that when the conforming loan limits are reduced later this year, it will cause some to select mortgage programs they might not have considered such as adjustable rate mortgages or piggy-back second mortgages.  It seems to me that Congress should allow the temporary higher loan limits to stay in place until housing becomes more stable.  There was some discussion during testimony yesterday by Congressman Miller in California, however as I mentioned, Ben Bernanke doesn't seem to think that the reduction in loan limits will impact housing significantly.  We'll know more in a few months…and don't forget, Fannie has issued "warnings" via their FAQs that we may see loan limits further reduced effective January 1, 2012.

Just for fun… since we're pretending to be in the future, here's a trip down 80s memory lane: 

Filed Under: Fannie, Freddie and FHFA, Home Equity Loans & Second Mortgages, Interest Rates, The Fed - FOMC

Fannie Mae Homepath Buyer Incentive Extended Once Again

June 16, 2011 by Leave a Comment

Fannie Mae is extending their buyer incentives of 3.5% towards closing cost on qualified Fannie Mae homes through October 31, 2011.  In addition, they're also offering real estate agents a selling bonus of $1,200.   

Here are some details for qualifying for the Fannie's Homepath Mortgage special (from the Homepath website):

  • Buyers and/or selling agents (the agent representing the buyer) must request the incentive upon submission of initial offer in order to be eligible.
  • The initial offer must be submitted on or after June 14, 2011 and close by October 31, 2011. If an initial offer was made prior to the effective date, the offer is not eligible for the incentive.
  • The sale must close on or before October 31, 2011. No exceptions will be made to this deadline.
  • Only buyers purchasing a HomePath property as their primary residence may receive up to 3.5% in closing cost assistance. Second homes and investment properties are excluded from the incentive.
  • Buyer must sign the Owner Occupant Certification Rider to the Real Estate Purchase Addendum.
  • If a buyer's total closing costs are under 3.5%, the difference will not be available as a credit to the buyer.

Don't forget, the Fannie Mae Homepath Mortgage does not require an appraisal and there is no private mortgage insurance for credit scores over 660.   Fannie Mae will lend up to the high balance conforming loan limit, which is currently $567,500 in the greater Seattle area (this loan limit is set to be reduced October 1, 2011).  For more information about Fannie Mae's Homepath Mortgage, click here.

Homepath We are pleased to offer the Fannie Mae Homepath Mortgage for homes located anywhere in Washington.  Here's an example of rates effective as of June 16, 2011 at 9:45 am for this home located in the Crown Hill neighborhood in Seattle offered at $408,000 based on a credit score of 740 or higher and utilizing the 3.5% credit towards closing cost closing in 30 days.  With the closing cost credit, home buyers can purchase qualified Homepath properties with just their down payment.

With a 3% down payment of $12,240, the 30 year fixed rate is currently 5.00% (apr 5.232). The principal and interest payment is $2,124.53 – remember there is NO private mortgage insurance!  

With a little extra down payment of $20,400 (5% down), the rate improves to 4.750% (apr 4.978) with a principal and interest payment of $2,021.91.

A down payment of 10% currently provides a rate of 4.625% (apr 4.584) with a principal and interest payment of $1,887.92.

Adjustable rate mortgages are available with this program too.

If you would like a rate quote or are interested in getting preapproved for a Fannie Mae Homepath mortgage, please contact me! 

Filed Under: Fannie, Freddie and FHFA, Homepath, Residential Purchase

Fannie Mae issues FAQs on the Pending Expiring Loan Limits: 2012 Limits Could Be Lower

May 19, 2011 by Leave a Comment

A couple days ago, Fannie Mae addressed questions regarding the high balance loan limits that are set to expire effective with Notes dated October 1, 2011 or later.  The current (technically "temporary") high balance limit in the greater Seattle – Bellevue area is $567,500, the new loan limit ("permanent") after September 30, 2011 is $506,000.

Here are some points from Fannie Mae's FAQ's:

Q2.  Are the loan limits definitely expiring? What would it take to get them extended or changed from the permanent loan limits?

Congress would have to take action to extend or revise the temporary loan limits, which were originally put in place through the Economic Stimulus Act of 2008 and have been extended through a series of additional legislative actions to provide support to the mortgage market…. The February report to Congress by the Departments of Treasury and [HUD] stated "the Administration recommends that Congress allow the temporary increases in limits that were approved in 2008 to expire as scheduled on October 1, 2011 and revert to limits established under HERA [Housing Economic Recovery Act]." As such, we do not expect any further extensions.

Q3. What will happen in 2012?  Could permanent loan limits go down?

…the Federal Housing Agency (FHFA) is required to evaluate loan limits annually, and then revise limits accordingly.  The first set of HERA loan limits (a.k.a. "permanent" loan limits) was established for calendar year 2009 based on the median home prices….While there have been median home price declines over the past three years, FHFA followed a policy to "not permit declines relative to the prior HERA [permanent] limits."

…no changes are expected to those permanent limits between October 1, 2011, and December 31, 2011.  FHFA has not indicated whether it will continue its policy of not permitting declines in HERA-based limits beyond 2011…2012 loan limits could decline from those that will apply in the fourth quarter of 2011.

Loan limits for 2012 are expected to be released by FHFA in mid-November of this year.  Current counties that have temporary "high balance" loan limits in Washington State are:

  • King 
  • Snohomish
  • Pierce
  • San Juan
  • Kitsap
  • Jefferson
  • Clark
  • Skamania

Only King, Snohomish, Pierce and San Juan Counties will continue to have high balance loan limits from October 1, 2011 to December 31, 2011.  The other Washington counties listed (and all counties not listed) above will be returning to a conforming loan limit of $417,000 through December 31, 2011.

We don't know what 2012 brings for loan limits. We should learn more in November.

If you would like me to provide a rate quote for your home located anywhere in Washington, click here.

Filed Under: Fannie, Freddie and FHFA
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