harp 2.0 - The Mortgage Porter

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

May 22, 2012 by Rhonda Porter 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: conforming high balance, harp 2.0

HARP 2.0 and Private Mortgage Insurance

May 11, 2012 by Rhonda Porter 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, pmi, refi

What are your odds of getting a HARP 2.0 refinance?

April 4, 2012 by Rhonda Porter 1 Comment

UPDATE SEPTEMBER 4, 2012: Odds are back to being a little tricky if you have a Freddie Mac securitized mortgage….bummer! Most of my lenders are limiting us to 105% LTV for Freddie Mac and unlimited LTVs for Fannie Mae.

UPDATE MAY 12, 2012: ODDS ARE GREATLY IMPROVED! We are now working with several lenders who are allowing expanded (unlimited) loan to values, including mortgages with existing private mortgage insurance and lpmi (as long as the mortgage insurance can be transferred). For a quote on a HARP 2.0 refi for your home located in Washington, please contact me.

Many home owners who have been patiently waiting for the expanded guidelines offered with HARP 2 to become available have found frustration. I’m being told that we are going to have the ability to originate HARP mortgages for my clients beyond 105% loan to value “soon” but as of the publishing of this post, I’m still limited to 105% LTV based on Fannie or Freddie’s estimated value of your home.

UPDATE 4/19/2012: Mortgage Master Service Corporation is adding several lenders who are allowing us to do unlimited loan to values! Stay tuned – I’ll have an exciting announcement soon!

UPDATE 5/12/2012: WE’RE COOKING WITH GAS! WE NOW HAVE LENDERS WHO ALLOW EXPANDED LTVS WITH APPRAISAL WAIVERS FOR HARP 2.0.

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

HARP 2 is the Home Affordable Refinance Program which is available to home owners who have their mortgage *securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. *NOTE: this is different than who you make your mortgage payment to (your mortgage servicer).

This program is intended to be a giant band-aid with our housing by allowing qualifed home owners to refinance their underwater mortgages, reducing their mortgage payment and/or term and hopefully stimulating the economy with the extra cash flow. Many are supposed to qualify without having an appraisal – it’s intended to be a streamlined process. It is streamlined and available…for some. For many it may feel like throwing spaghetti on the wall to see what sticks.

What are your odds of obtaining a HARP 2 refinance? It depends on what your scenario looks like. I’ve successfully closed many HARP 2 refinances without (and with) appraisals for both Freddie Mac and Fannie Mae securitized loans. Here’s what I can tell you now (remember, this is my opinion and subject to change…hopefully soon). This is not intended to discourage you from trying to obtain your HARP 2 refinance.

Your odds are strongly in your favor if your loan to value on your first mortgage is 105% or lower and if you do not have any private mortgage insurance. Zillow has seemed to be fairly accurate for estimating value. However the ultimate say on if the value is acceptable to create an “appraisal waiver” is Fannie Mae and Freddie Mac.

Your odds improve more if your mortgage is securitized by Fannie. Freddie seems to be a bit pickier with approvals and sensitve towards new debts or debt to income ratios.

Second mortgages or HELOCs have not been a huge issue [knock on wood]. Most second lien holders have been cooperative and agreeing to subordinate their lien position – even without an appraisal.

Private mortgage insurance is still not where it needs to be with the HARP program. If you have any type of private mortgage insurance, this is an additonal “layer” to work with for your loan approval. The pmi company needs to agree to have the insurance transferred to the new loan and the new lender needs to accept the new pmi. With pmi, your coverage amount will stay the same AND private mortgage insurance companies treat the transferred coverage as a “new loan” (you may be stuck with that pmi for a while on a new HARP loan). Your odds are better with pmi if your loan to value is 95% or lower.

UPDATE 5/12/2012: HARP 2.0 mortgages with private mortgage insurance are not as much of an issue as long as the existing private mortgage insurance can be transferred or if the lpmi can be converted to borrower paid mortgage insurance. Most private mortgage insurance companies are agreeable and we work with lenders who are accepting transferred mortgage insurance.

Odds are worse if your the company who holds your pmi is United Guarantee. UGIC is not cooperating as much as the other pmi companies. UGIC is participating in HARP, however they are not waiving the reps and warrants on the original file. Therefore they request and require the original package from the current mortgage servicer and it takes a lot longer than the other MI companies.

Current odds are [NOT] lower if you have LPMI (lender paid mortgage insurance). Your best bet may be to try your existing mortgage servicer to see if they can help you with your HARP 2 refi. It’s my understanding, some mortgage servicers are refusing to help their very own clients with this program. Depending on the type of lender paid mortgage insurance (how the premium was structured) it may be fairly simple to help you with HARP 2.0. Just like regular pmi, as long as the private mortgage insurance company allows it to be transferred and be “borrower paid” (some lpmi loans can be coverted to bpmi – borrower paid), we have lenders who will accept the pmi. YOU DO NOT HAVE TO GO BACK TO YOUR BANK OR MORTGAGE SERVICER WITH AN LPMI HARP 2.0 REFINANCE.

Again, I looking forward to sharing with you that I have unlimited LTVs and can help any Washington borrower who has pmi or lpmi but it’s just not the case “right now”. We are working on bringing on more lenders who may allow expanded guidelines that other banks seem to be restricting. Currently, I can help most borrowers who need a HARP 2 refi as long as the loan to value doesn’t exceed 105% per Fannie Mae or Freddie Mac’s estimated value of your Washington home. UPDATE 5/12/2012: With the lenders we now work with, we have no loan to value restrictions for Fannie or Freddie and pmi or lpmi is probably not an issue.

It’s very frustrating to see the overlays banks and mortgage servicers have put on the HARP 2. Banks are limiting the availability of a program that is designed to help stabilize housing and the economy. This needs to change. HARP needs to be widely available to all home owners who qualify.

I’m happy to review your HARP 2 scenario for your home located any where in Washington. I have successfully helped many home owners refinance with the Home Affordable Refinance Program, including investment properties and second homes.

If you would like me to provide a rate quote for your HARP 2 refinance, 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/