Update November 17th: On the 16th we received notification that the full implementation of the new changes will not be ready for funding in the secondary markets until March 2012. The reason for the delay is to get the DU automated underwriting systems programmed to except the new guidelines of no maximum LTV ( loan to value)and other changes. As I receive updates, I will post those items on this blog.
The government announced changes to its HARP (Home Affordable Refinance Program) October 24, 2011 and we are expecting the full program written guidelines by November 15th and the ability to fund these loans by December 1st. Based on what we know already, here is information and answers to your questions. “Guidelines are subject to change once the official written requirements become available”
If you're underwater on your conforming, conventional mortgage, you may be eligible to refinance without paying down principal and without having to pay mortgage insurance provided you are not currently paying mortgage insurance on your existing loan.
What Is HARP?
HARP was started in April 2009. It goes by several names. The government calls it HARP, as in Home Affordable Refinance Program.
The program is also known as the Making Home Affordable plan, the Obama Refinance plan, and Relief Refinance.
In order to be eligible for the HARP refinance program:
1. Your loan must be backed by Fannie Mae or Freddie Mac.
2. Your current mortgage must have a securitization date (closed) prior to June 1, 2009
If you meet these two criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo mortgage, you are not HARP-eligible.
HARP: Questions and Answers
Do these question-and-answers account for the "new" HARP program?
Yes, everything you are reading is accurate as of today, October 31, 2011. This post includes the latest changes rolled out by the Federal Home Finance Agency on October 24, 2011.
How do I know if Fannie Mae or Freddie Mac has my mortgage?
Fannie Mae and Freddie Mac have "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac. Your loan must appear on one of these two sites to be eligible for HARP.
If my mortgage is held by Fannie Mae or Freddie Mac, am I instantly-eligible for the Home Affordable Refinance Program?
No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier. Let us assist you in working through the details to verify your eligibility.
Is "HARP" the same thing as the governments "Making Home Affordable" program?
Yes, the names HARP and Making Home Affordable are interchangeable.
My mortgage is held by Fannie/Freddie. Now what do I do?
Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan -- so you don't forget. Give that information to your lender when you apply for your HARP refinance.
What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?
If neither Fannie nor Freddie has record of your mortgage, your loan is HARP-ineligible. However, you may still be eligible for a "regular" refinance to lower rates. Or, if your mortgage is insured by the FHA, you can possible use the FHA streamline refinance program.
Am I eligible for this revised Home Affordable Refinance Program if I'm behind on my mortgage?
No. You must be current on your mortgage to refinance via HARP. There are other parts to the HARP program that may provide assistance to homeowners who are behind on payments to avoid foreclosure. You can access the HARP website (click here)
Will the Home Affordable Refinance Program help me avoid foreclosure?
No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.
What are the minimum requirements to be HARP-eligible?
First, your home loan must be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months. Second, your mortgage must have been sold to Fannie or Freddie prior to June 1, 2009. And, third, you may not have used the HARP program before -- only one HARP refinance per mortgage is allowed.
Is there a 125% loan-to-value restriction for HARP?
No, there is no 125% loan-to-value restriction. All homes,regardless of equity are eligible for the HARP program.
I am really far underwater on my mortgage. Can I use HARP?
Yes, you can. There is no loan-to-value restriction under the HARP program.
Maybe I wasn't clear. I am really, really far underwater on my mortgage. Are you sure I can use HARP?
Yes, I am sure. The new HARP program specifically has no loan-to-value restriction so that homeowners in Florida, California, Arizona and Nevada can take advantage of it. You can 300% loan-to-value, and still be HARP-eligible. HARP is now unlimited LTV.
Will my home require an appraisal with the HARP program?
Sort of. Although your home's value doesn't matter for the HARP program, lenders will run what's called an "automated valuation model" (AVM) on your home. If the value meets reliability standards, no physical appraisal will be required. However, your lender may choose to commission a physical appraisal anyway -- just to make sure your home is "standing".
Is HARP the same thing as an FHA Streamline Refinance?
No, the HARP program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA (HUD). The programs have similarities, however.
Do I have to HARP refinance with my current mortgage lender?
No, you can do a HARP refinance with any participating mortgage lender. Sound mortgage, Inc. and I can assist you in refinancing at today's low mortgage rates.
So, I can use any mortgage lender for my HARP Refinance?
Yes. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender. Sound Mortgage Inc. and I can assist you with this program.
I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?
No, you won't need to pay mortgage insurance. If your current loan doesn't require PMI, your new loan won't require it, either.
I pay PMI now. Will my PMI payments go up with a new HARP refinance?
No, your private mortgage insurance payments will not increase. However, the "transfer" of your mortgage insurance policy may require an extra step. Remind your lender that you're paying PMI to help the refinance process move more smoothly.
What's the biggest mortgage I can get with a HARP refinance?
HARP refinances are limited to your area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $625,500. You can contact me for this information.
Can I do a cash-out refinances with HARP?
No, the HARP program doesn't allow cash out refinance. Only rate-and-term refinances are allowable.
Can I refinance an investment/rental property with HARP?
Yes, you can refinance an investment/rental property with HARP, even if the home was once your primary residence. You can refinance a home on which you're an "accidental landlord" via HARP. The loan must meet typical program eligibility standards.
Can I refinance a second/vacation home with HARP?
Yes, you can refinance an second/vacation property with HARP, even if the home was once your primary residence. The loan must meet typical program eligibility standards.
Are condominiums eligible for HARP refinancing?
Yes, condominiums can be financed on the HARP refinance program. Warrant-ability standards still apply.
Can I consolidate mortgages with a HARP refinance?
No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only. All subordinate/junior liens must be re-subordinated to the new first mortgage.
Can I "roll up" my closing costs with a HARP refinance?
Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed the local conforming loan limits, however.
I am unemployed and without income. Am I HARP-eligible?
No. Income verification is required for the HARP refinance program.
My original mortgage was a stated income loan. Will my income be verified with a HARP refinance?
Yes, with HARP, applicant income is verified in the same manner as with a traditional refinance -- via a combination of W-2s, paystubs, tax returns and other, underwriter-requested documentation.
What are the HARP program's mortgage rates?
Mortgage rates for the HARP program are the same as for a "traditional" refinance. There is no "premium" for using the HARP program.
Do HARP refinances use Loan-Level Pricing Adjustments?
Technically, loan-level pricing adjustments do not apply to HARP refinances, but borrowers may be subject to LLPAs based on their respective credit scores or home-types (e.g.; 2-unit, 3-unit, 4-unit). Loan-to-Value LLPAs are reduced and/or waived.
Is there a minimum credit score to use the HARP program?
No, there is no minimum credit score requirement with the HARP refinance program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.
What does the term "DU Refi Plus" mean?
"DU Refi Plus" is the brand name Fannie Mae assigned to its particular flavor of the HARP program. "DU" stands for Desktop Underwriter. It's a software program that simulates mortgage underwriting. "Refi Plus" is a gimmicky-sounding term that could have been anything. The name has been trademarked, however. As an aside, Freddie Mac is using the branded name "Relief Refinance".
Can I remove my spouse or a co-signer with a HARP refinance?
Maybe. HARP guidelines specifically prohibit removing a co-signer from the note, but there are circumstances in which you can remove a co-signer from the mortgage and from the deed so that the former co-signer has no ownership interest in the home.
For how long should I lock my mortgage rate via the HARP Program?
Lock for 30 days, at minimum. This is because the HARP program, while streamlined for simplicity, still has some grey areas that can lead to delay. It's better to have a rate lock that lasts too long than not long enough.
When does the HARP program end?
If you are HARP-eligible, you must close on your mortgage prior to January 1, 2014
How do I apply for the HARP program?
You can apply on-line by accessing my website (click here) or contact me for other options.
There is no fee or obligation to apply For the Home Affordable Refinance Program
Please feel free to contact me with questions or to get a “No Cost or Obligation” analysis if you and your home will qualify for the HARP refinance program, Access my webpage (click here)
Lastly, don't forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. It's meant to give underwater homeowners a chance to refinance to lower their monthly payments or reduce their term with close to the same payment which will increase equity faster. If you need foreclosure help, call your current loan servicer immediately.
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