Posts Tagged ‘HARP’

Tapering impacting interest rates

January 29, 2014

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Yesterday, The Mortgage Blog focused on the Federal Reserve’s QE3 Tapering strategy. Today, let’s discuss how Tapering could impact the interest rate market.

Most analysts felt interest rates would rise as the Federal Reserve exited the bond buying business. A funny thing has happened so far in 2014… the market has slightly improved over the course of the month. This can be partly attributed to the Federal Reserve’s decision to not exit the bond market in one fell swoop. It is also because of current economic news in the world.

With the release of some stuttering US economic news, along with other key global economies showing signs of slowing down(China), these factors are leading to a global selloff of stocks in all of the world’s markets. All of the sudden, US Bonds are being viewed as a safe haven. Foreign investors are buying bonds at a faster rate than the Federal Reserve is exiting the market.

The Federal Reserve’s exit plan, so far, was well thought out and enacted at the right time. Interest rates have not increased, and bond markets are stable. What does this mean for those looking for a new mortgage?

The prevailing theory is interest rates would climb into the upper 4’s. Instead, rates have stayed in the low to mid 4’s. Use this opportunity to still take advantage of historically low interest rates. Whether buying a new home or refinancing an existing one, now is the time to get started. If the property is in the state of Georgia, I can help get the process underway.

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HARP 3? Maybe!

July 15, 2013

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When HARP was created by the government to refinance homes that were underwater, the goal was for seven million homeowners to use the program. Due to the guidelines, HARP got off to a slow start. Roughly two years after the program began, less than one million homeowners were able to take advantage of it. This caused the government to rework the guidelines, and HARP 2 was born.

By November 2012, HARP 2 was in full swing and the pace of refinancing tripled. Even still, the total number of homeowners able to use HARP is well below the goal of seven million. To help reach the goal, HARP 3 is being proposed. To be clear, nothing has passed Congress. That means HARP 3 doesn’t yet exist, but it is gaining traction.

Here are some of the potential changes to come with HARP 3:

  1. Expand HARP to include all loans and not just those owned by Fannie Mae and Freddie Mac. This would include subprime, Alt-A, stated income/asset, and no doc loans.
  2. Eliminate the cutoff date of May 31, 2009 and allow all qualifying homeowners to use HARP.
  3. Allow homeowners to take advantage of HARP more than once. Homeowners who used HARP when it first came out got a rate in the mid to upper 4’s. As we all know, interest rates dropped into the 3’s, but homeowners who had already used HARP couldn’t take advantage of these historically low rates.
  4. Allow high balance loans to use HARP.

As I said, nothing is imminent as the proposed changes have not been approved by Congress. We at least know some of the proposed changes. Once there are concrete details on HARP 3, The Mortgage Blog will certainly let you know.

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HARP Extended

April 11, 2013

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HARP 2 has officially been extended through 2015. Originally it was set to expire at the end of 2013, but no more!

I know what you may be thinking, “what is HARP?”

HARP is the refinance program created by the government to help homeowners who are underwater refinance their current home loan and take advantage of historically low interest rates. HARP is also known as Freddie Relief, DU Refi Plus, and more names, but it is all the same program.

How do you qualify? Assuming you are making your mortgage payments on time, it comes down to only two criteria:

1. Does Fannie Mae or Freddie Mac own your loan? You can find out by going here for Fannie Mae, or here for Freddie Mac.
2. If Fannie or Freddie has your loan, then was it securitized prior to June 1, 2009

If you can answer yes to both of those, you are most likely good to go. It doesn’t matter if you have PMI, a second mortgage, or anything like that. Those are obstacles that can be overcome. The one thing HARP cannot do is consolidate loans or allow you to take cash out. HARP is designed to refinance and lower the payment on your first mortgage.

If you are sitting out their with a mortgage you got prior to June 1, 2009 and haven’t refinanced yet, you should explore this possibility. You can get started today by completing a loan application and seeing if you qualify for HARP. It doesn’t matter if you owe more than your home is worth, you could still refinance into a lower rate.

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New Years Resolution – Do HARP in 2013

December 18, 2012

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The government’s Home Affordable Refinance Program, known as HARP, is slated to run through 2013. If you haven’t taken advantage of HARP yet, time is beginning to run out.

HARP began in early 2009 as a way to help homeowners underwater on their mortgage refinance into the historically low interest rates of the past couple of years. The goal was to refinance 7 million households. Since the number of homeowners qualifying to use HARP wasn’t quite hitting the target, it was revamped into HARP 2 back in late 2011. While the program was overhauled, the date for the program coming to an end wasn’t extended.

While there is talk of an extension and even a HARP 3 (to allow more homeowners to use it), for now it is all talk. To ensure you are able to use HARP, make it your new years resolution to refinance using HARP before the end of 2013.

What is HARP:

  • You must have a conventional loan that is owned by Fannie Mae or Freddie Mac
  • You needed to have got your loan prior to March 1, 2009 (for Fannie Mae’s version) or prior to June 1, 2009 (for Freddie’s version)
  • Mortgage payments must have been made on time in the last year
  • If you have a second mortgage OR pay monthly PMI on your mortgage, you most likely still qualify for HARP

Those are just the general guidelines. If you bought your home in mid 2009 or earlier, made payments on time, and have a conventional loan, it is worth checking out to see if you do qualify for HARP and can refinance into today’s historically low interest rates. If your home is in Georgia, I can help you get the ball rolling on the refinance. Contact me today to get started.

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HARP 2.0 review

August 21, 2012

HARP 2.0 kicked into full gear during the spring. The revamped program has been around for roughly 5 months now. It is time to look back and see if it is working as it was originally advertised. Some of the changes included homeowners being able to refinance with any lender regardless of if they have PMI, a second mortgage, or if they are really, REALLY underwater on their mortgage.

Let’s look at each of those from my own client’s experiences and what has been commonly found true in the industry:

#1. Homeowners can refinance even if they are underwater on their mortgage and still not pay PMI if they do not currently pay PMI.

This is working out as planned. If a homeowner does not have PMI on their loan and qualify for HARP, then the refinance can take place and no PMI will be required for the new loan.

#2. Homeowners can refinance even if they DO have PMI on their current loan.

This is mostly true. Almost all of the PMI companies to allow for transfers of the current mortgage insurance policy to the new loan. Your loan officer will be able to determine who has your PMI and if they allow for PMI transfers.

#3. A homeowner can refinance even if they have a second mortgage.

This is probably mostly true as HARP 2 allows unlimited total loan to value. Since HARP 2 began, I have not had a subordination request denied by a second mortgage company. This isn’t to say NO ONE has had one denied. I’m sure someone, somewhere has still had a subordination request denied. From my experience, HARP 2 is working as advertised in this regard.

#4. A homeowner can refinance even if they are REALLY underwater on their mortgage.

Depending on what you read, this can be true or untrue. There have been reports of some homeowners still being denied, but there are now no limits on the loan to value. Homeowners that were previously denied for being too far underwater are able to refinance.

#5. A homeowner can refinance with any lender using HARP 2.0.

This one seems to be mostly no if the loan to values exceed 125%. If the loan to value is at or below 125%, then yes, in most cases many banks and mortgage brokers can do the refinance. However, when the loan to value moves over 125%, then fewer banks and brokers can actually do the refinance. For some reason, 125% seems to be the cutoff for the “any lender” aspect of HARP 2. If a homeowner falls into this category, then their current loan servicer is probably their only option.

For my own mortgage, I was in this same situation. My loan to value sits over the 125% level, and I was unable to do the HARP 2 refinance through the company I work for. I had to use my current loan servicer. The good news is, I was able to refinance my mortgage to a rate of 4.250%. The only downside was the interest rate. My rate was roughly 0.500% higher than the rate I could have got somewhere else. I didn’t have a choice as I needed the unlimited loan to value. A rate of 4.250% was better than not refinancing at all.

The moral of the story – HARP 2 has mostly accomplished what it set out to do. The only caveat being if one needs an unlimited loan to value refinance. Under that scenario, the options mostly seem to be limited to one’s current loan servicer.

How should a homeowner proceed? I would contact a loan officer with your preferred lender first. They should be able to review your situation and see what you might qualify for with HARP 2. If you do need an unlimited loan to value and your current loan servicer, then you can call and see what they can offer. The advantage of contacting your preferred lender first is you’ll know your options and the going interest rates that are available. That could help when negotiating with your servicer if they are you only option.

Whether it is your primary residence, a second home, or an investment property… if the home is located in the state of Georgia, I can help. Contact me today, and we can evaluate what you qualify for with HARP 2.

Accidental Landlord and HARP

February 14, 2012

“Accidental Landlord” is the term being thrown around to describe the scenario when a homeowner bought a new primary residence but was unable to sell their current primary residence. When this occurs, the former home they still own is converted into an investment property. Would these homes be eligible for HARP?

The short answer is – yes. If the homeowner qualifies for HARP (the major qualifying points of HARP include Fannie/Freddie holding the loan, got the loan prior to March 1, 2009, and current on the payments), then there is a good chance they can use HARP on this property.

What are some of the details a homeowner needs to know:

  • The max loan to value (known as LTV) may not be unlimited when HARP 2 fully kicks in later this spring. The unlimited LTVs may only be for owner occupied homes and not investment properties. The max LTV on the “accidental landlord” properties may be limited to something like 125% or 105%. We won’t know for sure until HARP 2 is fully rolled out.
  • While they are similar, Fannie Mae and Freddie Mac may handle this scenario differently from one another. First, find out who owns your mortgage. You can do this by using their online look up tools. To check Fannie Mae, use this link. For Freddie Mac, go here. Then we’ll need to check the individual guidelines for Fannie Mae and Freddie Mac to see how each handle the “accidental landlord” scenario.
  • You also need to let your loan officer know if you pay private mortgage insurance (PMI), have Lender-Paid PMI (LPMI), have a second mortgage, or if the property is a condo. Any of these can change the course of how the loan is processed.

There are some hurdles to jump through if a homeowner became an “accidental landlord.” That said, there is the possibility of using HARP even if you converted your former residence to an investment property because you couldn’t sell it. If this describes your situation, and the property is in Georgia, contact me and we can explore the possibility of using HARP to refinance that property.

Political Rhetoric

February 7, 2012

Over the past several weeks we’ve heard political candidates talk about various plans to help the housing industry. What are these plans and how will they impact the housing industry?

The two ideas that are being discussed the most out there include partial debt forgiveness for mortgages that are underwater AND helping homeowners refinance.

How are these going to impact the housing industry? Probably not much as they may never see the light of day. Right now this is all talk. For something to go into effect, it has to be approved by the House and Senate. Then the President has to sign off on the proposal. Since this is an election year, it is doubtful that either side will be eager to work with their opponents in 2012. Expect stagnation (not innovation) out of DC this year through the election.

If any of these talks do signify something substantial, you know The Mortgage Blog will be all over it!

Instead of waiting for news out of DC, take a look around the current state of the market:

  • if you are thinking of buying a home, it is still a buyer’s market and rates are ridiculously low. Now is the time to get out there and take advantage of it. I can help you get started with the prequalification process.
  • if you own a home and are underwater, contact me to see if you qualify for HARP. This is a government sponsored refinance program helping responsible homeowners refinance even if they are underwater. To know more, contact me or read some of my previous posts found here and here.

If the home you are looking to buy or refinance is in the state of Georgia, I can help you get started.

Don’t get caught up in the talk going back-and-forth over the next several months. You might just miss out on the great opportunities already at hand.

HARP 2 Inquiries

February 2, 2012

The announcement of HARP being revamped took place about three months ago (for more on HARP, scroll down to read previous posts from this blog). Since the announcement, I’ve spoken with at least one or two people per day about the program and how it might help them. Most of the homeowners I’ve spoken to need the unlimited loan to value portion of the changes to begin. That is scheduled to start in the spring, so we are waiting to begin the refinance process.

In the meantime, I have put together a list of clients with their mortgage needs in relation to HARP. After a 5-10 minute conversation, I have categorized clients by whether their loan is owned by Fannie Mae or Freddie Mac, if they have PMI, and if there is a second mortgage on the property. Once the unlimited portion becomes available, I can quickly contact each person and start the refinance process.

If you’d like to know about HARP, own a property in the state of Georgia, and have about 5 minutes, reach out to me by phone or email. We can begin the conversation and see whether we should move forward now OR wait until the unlimited loan to value portion of HARP is available. If that is the case, I’ll add you to the list and contact you as soon as unlimited loan to values are available.

If you are a homeowner and would like to refinance using HARP, this is a call you need to make to see if you qualify and how to move forward. Planning is key here because when unlimited loan to values start, it is going to be a day-after-Thanksgiving-get-into-Wal-Mart rush to underwriting.

Getting a headstart on this rush would be ideal.

HARP and mortgage insurance

December 13, 2011

When HARP first rolled out a couple of years ago, homeowners with private mortgage insurance would not qualify for the program. Some changes were made along the way that allowed private mortgage insurance (known as “PMI”) to be transferred to the new loan originated through HARP.

But not all PMI loans are created equal. What about homeowners who went with Lender Paid Mortgage Insurance instead of a borrower (monthly) paid PMI?

It actually depends on the company providing the mortgage insurance coverage. Some mortgage insurance companies are reviewing files and considering transferring the coverage to the new HARP loan. Other mortgage insurance companies are not transferring their mortgage insurance policies at all regardless of the type (borrower paid versus lender paid).

It is helpful to know who provides your mortgage insurance. You can find this out by looking in a couple of places. First, try your monthly mortgage statement. If nothing is mentioned there, try your HUD-1 (settlement statement) you got at closing. Last resort, pull out that LARGE stack of papers the attorney gave you from closing. One of the documents you signed would have been a mortgage insurance disclosure. That may also tell you who is providing your private mortgage insurance.

Again, there is no guarantee the mortgage insurance can be transferred. Knowing who is providing the coverage would allow me to see if any of the lenders I work with would be able to get the PMI transferred to your new HARP loan. Regardless if it is borrower or lender paid mortgage insurance, there may be a source.

UPDATE as of 12/20/2011 – Over the past week, several of the lenders I work with have said they cannot refinance a loan using HARP if it has LPMI. For now, it seems that if your loan has monthly paid PMI, we can look to transfer it to the new loan. If it has LPMI, the potential refinance using HARP is on hold.

HARP 2 is here!

December 9, 2011

Do I have your attention?… Good! The highly anticipated release and implementation of HARP 2 has arrived. For background on HARP (the Homes Affordable Refinance Program), check out my previous posts. There is a detailed “question and answer” style post here. Also, this post details the changes now allowed by Fannie Mae and Freddie Mac.

Some of my lenders have (finally!) released their guidelines and are accepting loan applications for the revamped HARP. While the guidelines individual lenders use can vary from Fannie Mae or Freddie Mac guidelines, from what I’ve seen so far, they seem to mirror one another.

Here are some specific details for using the updated HARP program:

  • allows up to 125% loan to value (LTV) for owners primary residence and second homes (was 105%). The unlimited LTV program will not start until 2012.
  • investment properties can be refinanced up to 90% LTV (was 80%). To use HARP on an investment property, the property must have originally been purchased as an investment property (not converted from a primary residence to an investment property).
  • debt to income ratio can be as high as 55% (was 45%)
  • unlimited total loan to value for homes with second mortgages. That said, the second mortgage company must subordinate their loan behind the new first mortgage to qualify
  • The “old” rules of requiring Fannie/Freddie to own your loan, you got the mortgage prior to early 2009, and being current on the payment still apply in order to qualify.

These are exciting developments that homeowners can now use and refinance into much lower interest rates. If the property is in Georgia, and you think you might qualify to use HARP, contact me and we’ll find out!


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