Posts Tagged ‘Obama Refi Plan’

New Years Resolution – Do HARP in 2013

December 18, 2012

blog-author-clayjeffreys2

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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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.

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!

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!

HARP revamped

October 24, 2011

The government announced changes to the HARP program this morning (October 24, 2011). I know there will be lots of questions about the program and the changes, so let’s try a “Q and A” approach to this post!

* I’ve offset the updated portions of HARP with bold colored text. *

Q: What is HARP?

A: HARP is the Home Affordable Refinance Program, but like characters from the Lord of the Rings, it has many different names including Making Homes Affordable, DU Refi Plus, Freddie Relief, and some even refer to it as the Obama Refi Plan.

Like HARP, Gandalf has many names including Gandalf the Grey, Gandalf the White, The White Rider, Greyhame, Mithrandir, Stormcrow, The Grey Pilgrim, Tharkun, Olorin, Láthspell… you get the idea.

Q: Does anyone qualify for HARP?

A: No. There are two main items that each current homeowner must meet to qualify. First, either Fannie Mae or Freddie Mac must own your mortgage. Second, Fannie or Freddie must have received your loan prior to June 1, 2009.

Q: How do I know if Fannie Mae or Freddie Mac own my loan?

A: Great question! It is nice that Fannie Mae and Freddie Mac have both created a look-up tool to make it easier to find out if they own your mortgage. To use Fannie Mae’s, use this link. For Freddie Mac, go here.

Q: Are there any other criteria to meet in order to qualify:

A: Yes, there are other items that potential borrowers must meet. These include being current on your mortgage payments, no late payments in the last 12 months, a qualifying credit score, and borrowers still must qualify based on their income.

Q: NEW – Are there loan to value limits?

A: No, there are now no loan to value limits to qualify. You can be 200% underwater on your mortgage and still qualify to use HARP. This was previously a major holdup to homeowners qualifying to use this program, and it has now been eliminated.

Q: If I have less than 20% equity in my home, will I have to pay PMI on the new loan?

A: No, you will not have to pay PMI on the new loan regardless of the loan to value/amount of equity in your home.

Q: I pay PMI now, can I qualify for the HARP program.

A: Your PMI payments on the new loan will not go up, but the transfer of your PMI from your current loan to the new loan will require some extra steps. Let your loan officer know if you have PMI on your current loan.

Q: I have a second mortgage on my home. Can I still qualify? Would I have to consolidate into one mortgage?

A: Yes, you can still qualify for HARP, but not by consolidating the mortgages. HARP does not allow homeowners to consolidate loans. The second mortgage company must agree to subordinate behind the new first mortgage. The revamped HARP may allow auto-subordinations to occur, which will make it easier for homeowners to use HARP if they have a second mortgage.

Q: Can I refinance any property?

A: Yes, you can. Primary residence, second homes, and investment properties can all qualify for HARP.

Q: NEW – Can I use HARP with any lender?

A: Yes, you can use any lender to refinance your mortgage. Prior to the loan to value changes from 125% to no limit, homeowners were required to use their current loan servicer to go up to 125%. That is no longer the case.

Q: When will these changes go into effect?

A: Lenders should begin coming out with updated guidelines in the next few weeks. Homeowners can more than likely begin using the revamped HARP in December 2011. The HARP is currently extended to go through the end of 2013, so there is plenty of time to take advantage of it!

Q: I have more questions, and would like to get started. What do I do?

A: If the property is in the state of Georgia, I can help get you started with the refinance process. Contact me and we’ll get underway with the process and answering any additional questions you have about HARP. If the property is not in the state of Georgia, contact a local loan officer/lender to get started.

Like the Lord of the Rings, the HARP has a lot of names and details that go with it. Unlike the Lord of the Rings, it won’t be an grand, epic, and sometimes exhausting 1,000+ page read cover to cover… but both come with a happy ending!