Posts Tagged ‘Freddie Open Access’

Last year to use HARP

January 6, 2015

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As posted on The Mortgage Blog in late 2014, interest rates are still around their lowest levels from 2014. That’s great news for home owners who are upside-down on their loans.

The Home Affordable Refinance Program, or HARP, is entering its final year (well, unless Congress extends the program again). HARP allows homeowners who are underwater to refinance into a lower rate. Combine a loan program for underwater homeowners with low rates, and it is a win for homeowners. How do you qualify for HARP?

If the home was purchased and securitized by Fannie Mae or Freddie Mac before June 1, 2009, AND the monthly mortgage payments have been paid on time for the past 12 months, you probably qualify for HARP. It doesn’t matter if you have a second mortgage or pay monthly mortgage insurance on your loan, you could still qualify for HARP.

You might be thinking… “I’m really underwater. I can’t qualify.” Just know homeowners can be way, WAY underwater. There is no limit.

Also, homeowners who did not have private mortgage insurance (known as PMI) on their loan initially can still refinance even without 20% equity in their home today. There would not be PMI on their new loan.

If you missed the historically low rates of 2012 and 2013, you may want to act quickly.  Rates are unlikely to return to those historic low levels, and they at the just about the lowest levels seen since May 2013.

To get started, contact me to talk about the pros and cons of HARP. Together, we can determine if you qualify for the HARP program.   It’s the best way to lower monthly payments when you owe more than your home is worth.  Don’t miss this opportunity!

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The refinance boom is dead, but why?

August 18, 2014

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As many in the industry know, refinances dwindled in 2014. Freddie Mac recently stated the “official” end to the refinance boom after the second quarter 2014. Freddie Mac goes on to say the purchase market has increased drastically this year, and the industry is now in its first dominated purchase market since 2008.

Realistically, Freddie Mac’s announcement is about a year behind. In early May 2013, interest rates began to rapidly climb. By the time the dust settled in mid June, rates had jumped over 1.25% from the low 3’s to the mid 4’s for a 30 year fixed rate loan. From the beginning of 2013 through the end of May 2013, refinances were over half of my business each month. Since June 2013 through August 2014, refinances only account for 20% of my business.

But why?!? Interest rates are still low. What many do not know is rates improved in 2014 and are currently lower than they were at the end of 2013. Also, some homeowners are still underwater in their homes. Don’t forget that HARP (Homes Affordable Refinance Program) still exists. Qualifying homeowners can refinance regardless of how far underwater they may be.

Rates are not as low as they have been now compared to early 2013. That doesn’t mean you should write off the possibility of refinancing altogether. If your home is in the state of Georgia, shoot me a quick email. We can talk about the pros and cons of refinancing by answering a few questions. You never know until you ask.

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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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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.

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!

Coming Soon: “HARP 2 – The Mulligan”*

November 17, 2011

  • “one of the most anticipated sequels of 2011” – says Clay Jeffreys of The Mortgage Blog
  • “it’s about time” – says a frustrated homeowner
* Note the program is still called “HARP,” but I’m referring to it as “HARP 2” for comedic relief and clarity’s sake

Unlike some movie sequels that get filmed (really, we needed a Spy Kids 4?!?), the Homes Affordable Refinance Program, known as HARP, needed a sequel. Why? Just like Rebook realized they needed to make more “office linebacker” commercials after its popularity from a past Superbowl, HARP needed some revisions to be more readily available to homeowners so more people can enjoy it!

Reebok knew what they were doing!

The original intent of HARP was to allow borrowers who were somewhat underwater refinance their mortgage into a lower rate. On paper, it sounded great. Sadly, unforeseen issues arose that didn’t allow the program to be as effective as the government hoped it would be.

What changes should one expect with the sequel “HARP 2 – The Mulligan”? There are a few major changes, but good portions of the HARP program remain the same. You can read about the program from my recent posts here (a recent “question and answer” session) and here (an overview when the program was first announced). Changes include:

  • No maximum loan to value limit. Once this part begins (to start in 2012), homeowners can be 200 or 300% underwater and still refinance to a loan without paying mortgage insurance if there is not mortgage insurance on the current loan.
  • Up to 125% loan to value ratio to be allowed with any mortgage company. This should get underway starting in December. Presently only your current mortgage servicer was allowed to go that high, which limited consumer’s ability to shop for the best interest rate.
  • Homeowners can qualify even if they are currently unemployed AND no income verification is required if the previous loan was a stated income loan as long as…
  • Homeowners have no late mortgage payments in the last 6 months, and only one late mortgage payment of 30 days in the last 7-12 months. In other words, if you are paying on time, you could refinance without income verification.
  • Private Mortgage Insurance (PMI) to be transferred to the new loan as long as it is not Lender-Paid PMI

As long as Fannie Mae or Freddie Mac own your mortgage, you got the mortgage prior to the end of February 2009, and you are current with the payments, there is a good chance you’ll qualify for new and improved HARP 2 loan program.

Some questions you may be thinking:

  • How do I know if Fannie Mae or Freddie Mac own my mortgage? Great question! You can use their online lookup tools. Use this link for Fannie Mae. Try this link for Freddie Mac.
  • How do I get started? If the property (primary residence, vacation home or investment property) is in the state of Georgia, I can help you get started. Contact me and we will take it from there.

Remember HARP 2 is not here yet, but it is coming soon. Refinance applications for the updated program can start in December, but some parts may not be available until 2012. Stay tuned to The Mortgage Blog for updates on all aspects HARP 2 availability in the coming weeks!

125% LTV Refinance Program Available

March 10, 2010

The Making Home Affordable Program created a program allowing borrowers to refinance even when the value of their home has decreased in value.  The allowable loan-to-value ratio for the program is 125% LTV, but up until now, most lenders were only offering the product up to 105% loan-to-value. 

Good news!! (drum roll) . . . . We can offer this program up to the full allowable loan-to-value of 125%. 

So how do you find out if YOU might qualify?

Question # 1 — Do you pay Private Mortgage Insurance (PMI)?

If you pay PMI on your current mortgage, while the program “allows” for your mortgage insurance company to adjust your insurance to accommodate for the new program (and the 125% LTV), in reality, mortgage insurers (or PMI companies) are not cooperating with the program.  So, if you pay PMI, unfortunately, I can’t help you.

If you do NOT pay Private Mortgage Insurance (PMI) . . .

Question # 2 — Do you have a 2nd mortgage?

If you have a 2nd mortgage, you can qualify for the program, but you can NOT pay off the 2nd mortgage as part of the new refinance.  The only option would be to have the 2nd mortgage subordinate to the new mortgage.  And, if you are already in a negative equity situation (and needing the 125% LTV guide of the program), there is a good chance that the 2nd mortgage company will not approve your subordination request.  For more information on 2nd mortgage subordinations and why 2nd mortgages can be a refinance road-block, read my post here.

If you do NOT pay PMI and you do NOT have a 2nd mortgage . . .

Question # 3 — If your loan currently owned by Fannie Mae or Freddie Mac?

To check to see if your loan is owned by Fannie Mae, you can use their loan lookup tool online.  NOTE:  when you hit “get results” the top of the screen will appear as if the form has not been submitted; you need to scroll down to see the results of the search.

To check to see if your loan is owned by Freddie Mac, you can use their loan lookup tool online.

If you do NOT pay PMI, and you do NOT have a 2nd mortgage, and if your loan IS owned by either Fannie Mae or Freddie Mac . . .

You are eligible and I can help.

Call me and let’s talk through the details, options, your qualifications, etc.  Hope to hear from you soon!  Soon, as in, before mortgage rates go up April 1st (my professional “guess” is that interest rates will be at 5.625% on April 1st, 2010 . . . I know that will be April fool’s Day, but 5.625% and rising interest rates is nothing to joke about).