Why May 31, 2009 is the cut-off date for Home Affordable Refi Program (HARP 2)s

March 23, 2012 by 51 Comments

I'm on a confererence call with Fannie Mae regarding the updates made to HARP 2. Someone has asked about how the date was selected for the cut-off of when when a mortgage is eligible for HARP 2.  The answer from a gentleman representing Fannie Mae said (paraphrased – this is a conference call):

Because anyone who bought a home or obtained a mortgage June 1, 2009 or later, knew the they type of housing marketing were getting into.  

The Fannie Mae rep insinuates that those who financed prior to June 1, 2009 may have not been aware of the dramatically changing climate in the housing industry.  

By the way, the date of May 31, 2009 is not the closing date – it is the date Fannie Mae securitized the loan which may be weeks after the closing date. I have had clients who have missed qualifying for a HARP refi because Fannie Mae securitzed their loan ON June 1, 2009, disqualifying them by one day!

I was surprised by the Fannie Mae rep's response. I assumed there was a more scientific reason for the date of loans securitized prior to June 1, 2009 instead of "these borrowers knew better".

In my opinion, the date should be removed. Why punish borrowers who happened to refinance or buy after that time period. If Fannie Mae's argument is that these borrowers knew better, how could they continue to have mortgage programs available during that time? I feel that if borrowers are qualifed and can benefit from a HARP refi, they should be allowed to have access to this program to help their personal finances and therefore, the economy to improve.

Other factors Fannie Mae is stressing is that loans are still underwritten based on risk – especially borrowers in a negative equity position.  It's not guaranteed that HARP refi's will receive an appraisal waiver and not all scenarios will receive an approval for a HARP refinance.  I've been contacted by Washington area home owners who lack steady income or have blemished credit assuming they will qualify – they may not. We won't know until we submit your loan scenario to Fannie Mae's automated underwriting system DU Plus and have a response before we can determine IF someone qualifies for HARP and what documentation will be required.

If you are interested in a Home Affordable Refi (HARP 2) for your home located anywhere in Washington, please click here.

Filed Under: HARP - Home Affordable Refi, Opinion

HARP 2.0 Update

March 20, 2012 by Leave a Comment

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!

Filed Under: HARP - Home Affordable Refi

HARPy St Patty’s Day

March 17, 2012 by Leave a Comment

image from www.mortgageporter.com

I’ve been checking Fannie Mae’s website for the much anticipated release of the expanded HARP guidelines (often referred to as HARP 2) which is scheduled to take place this weekend.

Click here for your HARP 2 rate quote for your home located anywhere in Washington.

Once the guidelines are released, I will review them and plan on posting them here on my blog to share with Washington homeowners hoping to refinance and my readers. Many home owners have put their HARP refi’s “on hold” waiting for the expanded guidelines which will allow more home owners who have lost home equity to refinance their conventional mortgages (if securitized by Fannie or Freddie prior to June 1, 2009).

We don’t know what the bank or lender guidelines (underwriting over-lays) will be. Some major banks have already pawned off some of their clients to large internet lenders who tend to have very inexperienced mortgage originators.

We do know there is significant pent-up demand for HARP 2’s expanded guidelines because of the delay in releasing this until this weekend. Home owners planning on refinancing should be well prepared and patient. The release of HARP 2 this weekend combined with the increase in FHA mortgage insurance premiums taking place on April 9, 2012 will cause many Washington home owners with both conventional and FHA underlying mortgages to want to refinance.

I will keep you posted as soon as I have any information.

Happy St. Patty’s Day

Filed Under: HARP - Home Affordable Refi, Refinance

Big Banks and Lenders preparing for HARP 2

March 3, 2012 by Leave a Comment

Yesterday I read that a huge internet lender is hiring thousands of loan originators to prepare for the volumes of business they're anticipating in two weeks once expanded guidelines of the Home Affordable Refi Program (aka HARP 2) are released by Fannie and Freddie over St. Patty's weekend.

I'm also hearing that some of the big banks are planning on using these internet companies to handle their volumes of mortgages they currently service. 

You do not have to return to who you make your mortgage payment to for your HARP 2 refinance.  If your home is located in Renton, Woodinville, Seattle, Samammish or anywhere in Washington state, I can probably help you with your HARP refinance. 

Click here for your HARP 2 refinance quote for your home (primary residence, investment or vacation property) located in Washington.

Mortgage rates and closing cost are not the only things you should be considering when you select your lender for your HARP refinance. I highly recommend that you research your mortgage originator.  Thanks to the NMLS, you can quickly enter your mortgage originators name, company name or license number and get a snapshot of their employment history.  Many of the LO's being hired by the online mortgage companies are inexperienced and may have closed few (if any) mortgage transactions before. They just know how to pass the LO exam to be licensed and how to fill in the blanks on a loan application.  "Filling in the blanks" is vastly different than completing a loan application and knowing which questions to ask from your client in order to assure a smooth closing.

Was your mortgage originator flipping burgers last month or closing loans? Click here to learn more about your mortgage originator: NMLS Consumer Access.  In addition to verifying your mortgage originator on NMLS, you can also try "googling" their name to learn more about them. A slightly lower rate quote (or any lower rate quote) doesn't mean anything if that mortgage originator is not capable of closing your loan.

Regardless of where home owners go for their refinance, they'll need to be a little more patient. It's my understanding that some banks are informing their clients they are taking up to 90 days to close refinances.  

We are expecting increased volumes at Mortgage Master Service Corporation too. Every mortgage company and bank should be. Our office is family owned and operated with our main office located in Kent, Washington. A majority (I'm guessing 90% or more) of our transactions are processed and underwritten at our main office. We also prepare your loan documents and fund your loan from our credit lines. Many of large banks or lenders don't have local processing or underwriting; they're often located outside of Washington. I have been working with my team at Mortgage Master Service Corporation for just shy of 12 years.  

I would love to be your mortgage originator for your refinance (or purchase!) for home located in Washington.  

Filed Under: HARP - Home Affordable Refi

HARP 2 Expanded Guidelines Available Next Month

February 17, 2012 by 1 Comment

During the weekend of March 17, 2012, possibly while you're enjoying an Irish HARP's at The Celtic Swell off the shores of West Seattle, Fannie Mae and Freddie Mac will be releasing the next set of expanded guidelines for the Home Affordable Refinance (coined HARP 2 or 2.0).

Many Washington area home owners with conventional mortgages closed prior to June 1, 2009 are eagerly looking forward to this St. Patty's Day so they can take advantage of the current low mortgage rates.  If you've been turned down for a HARP refinance before, you should consider trying again with this expansion.

HARP enhancements on the March 17 release include:

  • No maximum LTV (loan to value) ratio for fixed rate mortgages;
  • 105% maximum LTV for adjustable rate mortgage;
  • More properties will qualify to have the appraisal waived, including primary residences, second homes and investment properties.

Borrowers still need to qualify with income, employment, credit and assets. If a borrower is relying on income from a second job to qualify, there cannot be any gaps of employment for that job in the last 12 months.  Fannie Mae DU Plus will also require 2 months of reserves for second homes and six months reserves to be verified for investment properties.

Some Washington home owners are not waiting until next month to refinance. If Fannie or Freddie are accepting the home's current value (generally it's underwater no more than 105% LTV) they may receive an appraisal waiver.  You may not have to wait either!  If we do not receive an response from Fannie or Freddie with an appraisal waiver, we can work on improving your credit or savings while we wait for the next expanded guidelines next month.

If your home is located in Washington state, I'm happy to review your scenario.  For your HARP rate quote, click here.

For more information about HARP 2.0, 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 orhttp://www.fanniemae.com/loanlookup/

 

Filed Under: HARP - Home Affordable Refi, Refinance

Fannie Mae’s Home Affordable Refi HARP 2.0 (DU Plus) Update on LTVs and Appraisal Waivers

January 4, 2012 by Leave a Comment


HARP2mortgageporterYou won't need the luck of the Irish to refinance you underwater home in the Seattle (also known as the Emerald City) or anywhere in Washington after Saint Patrick's Day. The weekend of March 17, 2012 is when the next phase of HARP 2.0 will be officially released. And you may not need to wait until March for your HARP refinance; many are taking advantage of lower rates and refinancing now!

Per Fannie Mae's Release Notes issued yesterday for DU Refi Plus – HARP 2.0, we'll have the following enhancements:

  • No maximum loan to value ratio for fixed rate mortgages with terms up to 30 years
  • 105% maximum loan to value ratio for fixed rate mortgages with terms greater than 30 years and for adjustable rate mortgages 

Even though Fannie Mae states the loan to value caps will be removed, it's also noted the appraisal waiver will be "updated to further increase the number of loan casefiles that are considered for the…waiver".   

This update states the following transactions will be "eligible for consideration" to have the appraisal waived:

  • one-to-four unit properties;
  • primary residence (owner occupied), second or vacation homes and investment properties;
  • loans with a loan to value or combined loan to value (second mortgages) over 125%;
  • attached (condos, townhomes) and detached properties.

You may not have to wait until March to refinance depending on how underwater your home is. I'm currently working with clients from Des Moines, Kent and Seattle who had their appraisal waived and will be closing well BEFORE March as long as Fannie Mae estimates your loan to value is 105% or lower. It's unknown what value Fannie Mae's system will accept for your home until it is submitted to their automated underwriting program (DU).

Another reason NOT to wait until March to start your HARP application is to make sure your credit and debt-to-income ratios are in line.  Beginning your application today will allow us to review your current credit scenario to help assure you're in the best position to proceed with your refi, even if you have to wait until March for loan-to-value reasons.

From reading today's release notes, it looks like not all loans will qualify to have their appraisals waived…however you won't know unless you try!  It's also important to keep in mind that that banks and lenders may have their own underwriting overlays in addition to what Fannie Mae or Freddie Mac offers with this (or any) program.

I am encouraging Washington home owners to contact me for a rate quote. If it looks like we should wait until closer to March to proceed, we can keep your information and try again at that time.

If you have any questions about HARP 2.0 or any mortgage for homes located anywhere in Washington, please contact me!  If you want to stay informed, subscribe to my blog!

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 orhttp://www.fanniemae.com/loanlookup/

Filed Under: HARP - Home Affordable Refi, Refinance

Should You Refinance Now or Wait for the New HARP Program?

December 20, 2011 by Leave a Comment

Today someone body found my blog by googlineg: "Should I refi now or wait for the new HARP program". This is such a great and timely question that I thought I'd take a few moments to answer. 

The "new HARP" is actually available now on applications that are dated December 1, 2011 and later.  HARP (Home Affordable Refinance Program) is for mortgages that were securitized by Fannie Mae or Freddie Mac prior to May 31, 2009. This is different than who your mortgage servicer is (who you make your mortgage payments to) and the date the mortgage was securitized is often several weeks after the actual date your transaction closed. 

Washington State home owners are eligible for this program are especially excited for the "new HARP" (also referred to as HARP 2) because of the expanded loan-to-value guidelines.  Owner occupied homes will eventually have the 125% loan to value limit removed making it possible for more home owners who have made their payments on time but have lost equity in their homes to refinance into a fixed rate mortgage. Those opting for an adjustable rate mortgage will have a maximum LTV of 105%.

Why would somebody wait to refinance?  HARP 2 is releasing the expanded guidelines in phases. Fannie and Freddie are allowing lenders to offer HARP (DU Plus and Open Access) with March 15, 2012 being the date that loan to value restrictions are removed for this program. 

Another reason some home owners are waiting is that some private mortgage insurance companies and mortgage servicers are working out the final details on how to transfer or reissue pmi certificates. With HARP 2, borrowers with pmi should have more possibility of being able to refinance.

Why you should begin the refinance process now. I'm currently helping several Washington home owners with their HARP refi without an appraisal being required. After we receive the full loan application, we submit the loan to Fannie or Freddie's automated underwriting system to see what our approval is and what the conditions may be. Many HARP refi's are being now approved with the apprasial being waived which allows my client to decide if they'd like to lock in today's low rate now or wait and float their interest rate. 

If we discover that Fannie or Freddie are not accepting the value based on the current phase of HARP we are in, we continue the application and wait for the next phase to try again. This gives us time to work on anything that may need a little extra attention such as reducing debt to income ratios or improving credit scores. 

MortgagePorterDucks

This also provides an opportunity to get our ducks in a row and have your application completely ready so that when and if your transaction is approved without an apprasial being required, you're in position to close rather than starting with volumes other home owners hoping for their HARP refi.

We are currently accepting applications for HARP 2 refinances for homes located in Washington, even if some of the refinances may have delayed closings. I have several clients who are getting ready to close just after the new year, enjoying the benefit of their much reduced mortgage payments.

If your home is located anywhere in Washington State, I'm happy to help you with your refinance, click here for a HARP 2.0 rate quote.

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: Charity, HARP - Home Affordable Refi, Refinance

Refinancing when you have an existing Second Mortgage or HELOC

December 15, 2011 by 62 Comments

When you are refinancing your primary mortgage and you have an existing second mortgage or HELOC (home equity line of credit), the new lender will require to stay in “first lien position”. This boils down to who has first dibs on a property in the event of a foreclosure. Lien position is determined by the date the mortgage was recorded. When you refinance your first mortgage and you have an existing second mortgage, the new mortgage will have a recording date that is after the existing second mortgage. Technically, that would put the second mortgage or HELOC in “first lien” position, which would not be allowed with the new lender.  Click here for a no-hassle mortgage rate quote for your Washington state home. [Read more…]

Filed Under: HARP - Home Affordable Refi, Home Equity Loans & Second Mortgages, Refinance Tagged With: , , ,
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