Freddie Mac HARP 2.0 refis to get a little easier

August 11, 2012 by Leave a Comment

Last week, Freddie Mac issued a press release stating they plan on improving the guidelines for Freddie Mac’s HARP 2.0 program – Refi Relief and Open Access (more commonly known as HARP 2.0).  Freddie Mac HARP refi’s have proven to be more challenging to successfully process and close than Fannie Mae’s HARP 2.0 refi program.

At Mortgage Master Service Corporation, we are closing both Fannie Mae and Freddie Mac HARP 2.0 refinances. We have fewer lenders who offer Freddie Mac’s program due to their current program guidelines. This announcement from Freddie Mac is a big relief!

From Paul Mullings, Senior Vice President and Interim Head of Single Family at Freddie Mac:

“Once implemented the changes will give lenders a new measure of certainty and ease when they help borrowers with Freddie Mac owned- or guaranteed- mortgages take advantage of today’s historically low mortgage rates. This will help us build on the success of the HARP 2.0 and Relief Refinance Mortgage programs of helping more than 1.3 million Freddie Mac borrowers…”

This means that if you have been previously turned down for a Freddie Mac HARP 2.0 refinance, you may have another shot in a couple months.

Watch for an announcement around mid-September with more details to follow.  To stay informed, subscribe to my blog!

UPDATE September 18, 2012: Click here to check out  the improvements to HARP 2.0.

Filed Under: HARP - Home Affordable Refi Tagged With: ,

How Long Will PMI Stay on my HARP 2.0 Mortgage?

July 25, 2012 by Leave a Comment

This is a question that I’m often asked by Washington  home owners who are considering refinancing their current conventional mortgage using the HARP 2.0 program. The answers I’ve received from private mortgage insurance companies vary from “it’s up to the mortgage servicer” to “when the new loans principal reaches 78% loan to value”.  

If your current loan to value is triple-digit because of being underwater, the thought of paying private mortgage insurance for years may not sound appealing. Here are some points I encourage my clients to consider:

  • determine when your existing private mortgage insurance is set to terminate. If it’s before December 2013 (assuming the HARP program is not terminated early, which Fannie and Freddie have reserved the right to do) you could consider delaying your HARP refi so that you won’t have PMI on the new loan.
  • compare your existing principal and interest payment (excluding the private mortgage insurance) to the proposed HARP payment including principal, interest plus mortgage insurance.  Many of my clients are saving hundreds of dollars each month – even with keeping their mortgage insurance.
  •  consider how long you plan on keeping your home and what your alternatives may be. If you are underwater and are planning on staying in your home or eventually converting it to a rental property, reducing your payment now may be beneficial. If you are planning on doing a short sale, then refinancing at this time would probably not pencil out.

With HARP 2.0 refinances, when you have private mortgage insurance, most pmi companies are transferring the pmi certificates over to the new lender without any issues. The pmi rates stay the same so if you’re currently paying private mortgage insurance monthly, you can estimate that the new pmi payment will be roughly the same with your new mortgage payment.   

If you have lender paid mortgage insurance, often times it was paid for upfront and there will be no private mortgage insurance for the home owner to pay. Sometimes the lender paid mortgage insurance (LPMI) was being paid monthly by the lender and in those cases, the pmi company may convert the policy to “paid monthly” so the borrower can assume it.

If you’re interested in a mortgage rate quote for a HARP 2.0 refinance for your home located anywhere in Washington state, contact me.

Filed Under: HARP - Home Affordable Refi, Mortgage Insurance Tagged With: , , , , ,

Freddie Mac HARP 2.0 Loans Getting Tougher

July 12, 2012 by 15 Comments

One of the lenders that we work with for Freddie Mac HARP 2.0 refi’s has announced today that they are not accepting applications for loans locked after July 20, 2012.

The bank states they’re doing this to get a handle on their pipeline. If you’re in the process of refinancing via HARP 2.0 and you have a loan to value that exceeds 105%, you may already know that the process seems to be taking a couple months.

If you qualify for a HARP 2.0 refinance: if you have lost equity in your home and your current mortgage is securtized by Freddie Mac prior to June 1, 2009 – please do not delay starting your HARP 2.0 refinance… your options may be dwindling.

If your home is located in Washington state, I’m happy to help you with your refinance.

Filed Under: HARP - Home Affordable Refi Tagged With: , ,

HARP 2.0 Questions to ask your Mortgage Originator

June 9, 2012 by 9 Comments

HARP 2.0 (Home Affordable Refi Program) was revamped late last year to remove loan to value restrictions allowing more underwater home owners to refinance. So you may be wondering, why should you need to ask your mortgage originator if they have any loan to value restrictions with the HARP 2 program. In two words: UNDERWRITING OVERLAYS.

HARP 2.0 overlays are underwriting guidelines that are in addition to Fannie Mae or Freddie Mac’s program guidelines. Underwriting overlays are mandated by the bank and/or lender.  For example, as a correspondent lender, I work with several big banks, wholesale lenders and I can broker loans too. Currently most of the banks I work with have underwriting overlays that limit my maximum loan to value with HARP loans anywhere from 95 to 105% depending on the bank and scenario. Thankfully I also work with lenders who offer unlimited loan to values with no underwriting overlays for HARP 2.0, as the program was intended to be. 

Before you submit a loan application for HARP 2.0, ask the mortgage originator what is the max loan to value they can lend on.  If they are limited to 105% and your loan to value exceeds 105%, find another mortgage originator. HARP guidelines have an 105% ltv limit on adjustable rate mortgages and loans with a term greater than 30 years.

If you have PMI or LPMI, ask your mortgage originator if they are accepting transferred pmi BEFORE you start your application. Many lenders are not accepting HARP loans with existing pmi or lpmi (lender paid mortgage insurance). If you’ve been told this by your bank, seek another lender.

There are some scenarios where because of certain “credit enhancements” a loan may not be available for a HARP 2.0 – it’s more the exception than the norm.  And I’m hoping when (if) HARP 3.0 becomes available, those loans are allowed to take advantage of this program.

If your LO has told you that an appraisal is required, get a second opinion. Appraisal waivers are not automatically provided on all HARP 2.0 loans. It is not determined until your loan is ran through Fannie Mae or Freddie Mac’s automated underwriting systems (DU or LP) whether or not an appraisal is required. Sometimes the smallest detail may impact whether or not an appraisal waiver is granted, such as how your address is entered into the AUS. You many not need to spend money on the appraisal and it’s possible that you may receive an appraisal waiver at a later date as the valuations that Fannie and Freddie use change.

Because of the increased refi volumes created by expanded guidelines with HARP 2.0 and the reduced mortgage insurance now available for some FHA streamlined refi’s, banks and lenders are “cherry picking” what refinances they want. One way of doing this is by creating underwriting overlays. Due to these increased volumes, large banks and credit unions have hired on loan originators (or “mortgage tellers”) who may lack experience in the mortgage industry. (Remember, LO’s who work for banks or credit unions are not required to be licensed per the SAFE Act). They’re simply hired to fill out an application and are not savvy to actual guidelines.

I’ve been helping home owners who have been told by a mortgage originator that because they have pmi or their loan to value is 108%, that they don’t qualify for HARP 2.0 when actually, they do.  I’m not sure if LO’s don’t read Fannie/Freddie guidelines or if because they cannot offer it, they prefer to portray certain features are not available when what they should do is convey that they do not have access to those features (such as ltv’s over 105%), however another lender may.

If you’re considering refinancing or buying a home located anywhere in Washington, I’m happy to help you.  Click here if you would like me to provide you with a mortgage rate quote.

EDITORS NOTE: Since this was published, most of the banks we work with as a correspondent have pulled back their LTV guidelines to 105%. Wholesale lenders where we can broker have also made changes to guidelines or policies or have stopped accepting applications due to extreme volumes. Hopefully Congress will pass HARP 3.0 to help the Home Affordable Refi become more available. 

Filed Under: HARP - Home Affordable Refi, Refinance Tagged With: , , , , , ,

Hammered with HARP 2.0 Offers from Lenders You Don’t Know?

June 7, 2012 by Leave a Comment

I received this email from one of my readers:

"My mailbox is being bombarded with out of state Harp 2 "pre-approved" loan offers and I did call one of them and they talked me into running a credit report and when I found out their fees for the loan I didn't call them back and told them I had to think about it. I'm a not sure if this is a scam or not so I thought I would check locally…"

The Home Affordable Refinance Program (HARP aka HARP 2.0) has created a refi boom for mortgage originators. Many large banks are now telling their clients it may take up to three months to process their refinances due to the heavy volumes that are being experienced. Some banks have so much business that they're turning away clients just because they have private mortgage insurance or LPMI with their existing mortgage. NOTE: Our company is closing HARP loans and accepting HARP refinance applications with existing pmi and lpmi for properties located in Washington state.

HARP 2.0 has created a great opportunity for mortgage originators and companies to buy leads. I've always scratched my head at why a mortgage originator or mortgage company would have to buy leads. You have to wonder how their service is if they do not have enough business by clients who return to them for their HARP refinance. Especially if the company is out of state – is their business so bad they have to go out of state to find consumers who have never heard of them?

I would never work with a non-Washington based mortgage originator or company who has to buy leads in order to get a loan. However, should you decide to, please check the NMLS to make sure the company and mortgage originator are licensed to do business in Washington State.  The solicitations you're receiving from these out-of-state lenders must disclose the license numbers for the company. 

Google the company and the mortgage originator to learn more about them. Should you decide to proceed with someone you're about to spend several weeks with while your refinance is in process, you might want to check their credentials first.

If you are considering buying or refinancing a home located anywhere in the state of Washington, I'm happy to help you. I've been originating mortgages at Mortgage Master Service Corporation since April 2000 and I've never paid for a "lead". My business is completely referral, returning clients and those who find me from reading my blog. Our local mortgage company located in King County has been family owned and operated since 1976. 

Filed Under: HARP - Home Affordable Refi, Opinion Tagged With:

HARP 2.0 for your High Balance (aka Conforming Jumbo) Mortgage

May 22, 2012 by Leave a Comment

Conforming mortgages have a loan limit of $417,000 for a single family dwelling. Some counties in Washington, such as King, Pierce, Snohomish and San Juan, qualify for an additional higher limit known as "high balance" or sometimes called "conforming jumbo". In the greater Seattle area, the current high balance conforming loan limit is $417,001 to $506,000. (NOTE: FHA's high balance loan limit in greater Seattle is $567,500).  

High balance conforming mortgages may qualify for HARP 2.0, which allows home owners to take advantage of today's lower rates and refinance regardless of how much equity their home has lost.

You can learn more about Fannie and Freddie's programs and what I can offer Washington homeowners by reviewing my complete HARP 2.0 guideline.  

Here are some basic pointers for a high balance HARP 2.0 refi:

  • existing mortgage must be securitized by Fannie Mae or Freddie Mac. This is different than who you make your mortgage payments to. If when you obtained your mortgage, it was considered a jumbo/non-conforming (vs a high balance conforming), then odds are, it's not a Fannie/Freddie mortgage.
  • existing mortgage must have been securitized prior to June 1, 2009. This is different than when you closed your existing mortgage. Securitization often takes place weeks or even a few months after the mortgage is closed. 
  • maximum loan amount capped at current high balance loan limits. In greater Seattle, this is currently $506,000. It's possible to currently have a true high balance conforming mortgage at a higher loan amount since they were previously at $567,500 and rolled back to $506,000 recently. HARP 2.0 is limited to current conforming loan limits. A cash-in refinance may be a consideration for those home owners with those loans who want to take advantage of HARP 2.0.
  • no maximum loan-to-value unless your new mortgage is an ARM (they're capped at 105% ltv). It doesn't matter how much equity your home has lost – as long as it meets the rest of the criteria, HARP 2.0 may be an option.
  • most transactions do not require appraisal. Once an application is submitted, we are able to run it through Fannie or Freddies automated underwriting systems (DU or LP) which determines if an appraiser is required. Currently, a majority of HARP 2.0 refinances do not require an appraisal.
  • rate-term refinance only. You cannot take cash out or pay off a second mortgage/home equity line of credit.
  • second mortgages and helocs will need to agree to be subordinated. This is so that the new first mortgage keeps first lien position. I'm seeing most second mortgage lien holders being very cooperative and agreeing to subordinate. 
  • existing private mortgage insurance is okay as long as it can be transferred to the new loan. Even if your current mortgage has LPMI (lender paid mortgage insurance) it can probably be transferred to the new mortgage. 
  • owner occupied, second homes and investment properties qualify including single family detached dwellings, condos and townhomes.
  • one 30 day mortgage mortgage late allowed during the last 12 months IF it did not happen during the last 6 months.

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

What if your scenario doesn't meet the criteria for HARP 2.0?  You do have some options.  FHA may be a consideration, however it does have both upfront and monthly mortgage insurance (which is increasing on June 11, 2012). Current non-conforming jumbo rates are very low, however they require equity of at least 15% (combined with a second mortgage).  

Congress is pushing for HARP 3.0 which would expand the above guidelines to allow more underwater home owners participate in the Home Affordable Refinance Program.  And President Obama is promoting his refinance plan which would allow mortgages that do not qualify for HARP (not securitized by Fannie or Freddie) to be refinanced using an FHA insured mortgage.  

If your home is located anywhere in Washington and you've been current on your mortgage payments, I'm happy to review your options. I have been originating mortgages at Mortgage Master Service Corporation for the last 12 years.  I'm required to provide the following language if I'm trying to solicit your HARP refinance – and if your home is anywhere in Washington state, I am!

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/

 

 

Filed Under: HARP - Home Affordable Refi, Refinance Tagged With: ,

HARP 2.0 and Private Mortgage Insurance

May 11, 2012 by 2 Comments

The Home Affordable Refi Program (HARP 2.0) is a refinance program to help home owners who have lost home equity take advantage of today’s historic low interest rates.  In order to qualify for this program, the existing mortgage must have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009.  Learn more about the HARP 2.0 program here.

Loans with private mortgage or lender paid mortgage insurance (LPMI) who meet the securitization requirement are also eligible for HARP 2.0. The terms of the private mortgage insurance, as far as the rate, remains the same as what the home owner has on their existing loan. The existing coverage is transferred to the new HARP 2.0 mortgage if the coverage is still in effect.

Borrower Paid Mortgage Insurance (bpmi) is the most traditional form of mortgage insurance. Homeowners will see this in their monthly mortgage payment. If you currently have private mortgage insurance included in your monthly mortgage payment, you will have it in your new HARP 2.0 mortgage payment too. 

Lender Paid Mortgage Insurance (lpmi) is not “seen” in your mortgage payment. LPMI is essentially financed into your loan. Homeowners who have LPMI probably traded the monthly pmi payment for a slightly higher interest rate when they obtained their last mortgage with a loan to value greater than 80%. Often times, LPMI scenarios offered lower payments than bpmi or combo loans at the time they were originated.

Some mortgages with LPMI were “single premium” meaning the coverage was paid for in one lump “single premium”.  Single premium LPMI may be transferred to a new HARP 2.0 mortgage. 

It’s also possible that the existing LPMI may be paid monthly by the lender. In this case, the private mortgage insurance company may be able to convert the “LPMI” from “lender paid” to “borrower paid”.  The borrower is trading their higher rate mortgage with LPMI for a much lower rate with monthly pmi in their mortgage payment. The monthly savings has been significant.

It’s my understanding that once PMI is transferred to a new HARP 2.0 mortgage, private mortgage insurance companies consider this a new loan. This means that when the pmi may drop off is reset. Typically pmi drops off your mortgage when your loan to value reaches 78% of the mortgages loan to value based on the appraised value.  If your home is significantly underwater, the private mortgage insurance will likely remain until you can refinance.  PLEASE DO NOT LET THIS STOP YOU FROM GETTING A HARP 2.0 QUOTE. Mortgage rate quotes are free and it’s doesn’t hurt to find out what your options are.  Click here for your HARP 2.0 quote for your home located anywhere in Washington state.

Here are two scenarios from quotes I provided yesterday, May 10, 2012, for HARP 2.0 mortgages with existing lender paid mortgage insurance (both borrowers have excellent credit):

Owner occupied home in Federal Way with a loan amount of $283,000 and an estimated value of $186,000 with LPMI single premium. With 30 year fixed mortgage and a rate of 4.375% (apr 4.515) they are reducing their monthly mortgage payment by $459 per month!

Owner occupied home in Renton with a loan amount of $311,000 and an estimated value of $215,000 with LPMI that was being paid monthly by the lender. 30 year fixed mortgage and a rate of 4.500% (apr 4.569%) they are reducing their monthly mortgage payment by $422 even with the lpmi converted to borrower paid.

NOTE: The difference in rate above due to having a mortgage priced with discount or rebate. How you have your mortgage priced (with discount or rebate credit) is up to you!

If you would like me to provide you a quote for your HARP 2.0 refinance on your home located anywhere in Washington, please click here.

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/


Filed Under: HARP - Home Affordable Refi, Mortgage Insurance Tagged With: , ,

HARP 2.0: Higher Loan to Values now available at Mortgage Master Service Corporation

May 9, 2012 by Leave a Comment

Our company has been waiting and waiting for banks to remove their restrictions on loan to values for HARP 2 – Home Affordable Refinance. It's simply not happening quick enough to help underwater home owners in the greater Seattle area.  You can learn more about the Home Affordable Refi Program by checking out my online HARP 2.0 guide.

Mortgage Master Service Corporation has recently brought on additional lenders who offer expanded HARP 2.0.  We are now able to broker Fannie Mae – DU Plus HARP 2.0 loans with unlimited loan to values. We are in the process of adding other lenders who will allows us to broker Freddie Mac HARP 2.0 refinances with unlimited loan to values.  Currently, we are able to help if your loan to value is 105% or lower with a Freddie Mac HARP 2.0 mortgage.  UPDATE 5/11/2012:  I'm pleased to announce we now have unlimited LTVS for both Fannie Mae and Freddie Mac HARP 2.0 refinances.

For your HARP 2.0 rate quote on your home (primary, second or investment) located anywhere in Washington state, please click here.  You DO NOT have to return to your current bank or mortgage servicer (where you make your mortgage payments to).

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/

Filed Under: HARP - Home Affordable Refi
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