Call up Sean Loveland at 208-461-8889 or Grant Porter at 208-389-4709 to learn about the new Government Re-Finance program called HARP. This program will allow you to re-finance a home with negative equity. As of October 24th, 2011, the majority of homeowners who are paying their mortgage on time will have the option to refinance their home with no appraisal. If you have an FHA or VA loan you have already had this option available, but now almost everyone can benefit from this new change issued by Fannie and Freddie. It states that there is no limit to how far underwater your home is, and you can refinance to a lower interest rate no matter how much your home is worth.
Since President Barack Obama announced some exciting new refinance possibilities for homeowners who are having value and appraisal issues on their homes. It’s been over two years since the first HARP — Home Affordable Refinance Plan — program was announced. HARP is designed for borrowers who pay on time, but have property values that have dropped below their loan amounts.
The government announced changes to its HARP program October 24, 2011. 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.
Here are the details of the government’s new 2011 HARP refinance program.
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 Refi plan, and Relief Refinance.
In order to be eligible for the HARP refinance program:
- Your loan must be backed by Fannie Mae or Freddie Mac.
- Your current mortgage must have a securitization date 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, November 7, 2011. This post includes the latest changes rolled out by the Federal Home Finance Agency on October 24, 2011.
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.
IS “HARP” THE SAME THING AS THE GOVERNMENT’S “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 HARP-ineligible. However, you may still be eligible for a “regular” refinance to lower rates.
AM I ELIGIBLE FOR THE HOME AFFORDABLE REFINANCE PROGRAM IF I’M BEHIND ON MY MORTGAGE?
No. You must be current on your mortgage to refinance via HARP.
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. 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. 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.
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.
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.
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 a 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. Warrantability 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 resubordinated 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.
IS THERE A MINIMUM CREDIT SCORE TO USE THE HARP PROGRAM?
No, there is no minimum credit score requirement with the HARP refi program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.
DO I HAVE TO REFINANCE MY MORTGAGE WITH MY CURRENT LENDER?
In most cases no. You can do a HARP refinance with any lender you want.
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.
Can I take advantage of these new HARP changes today?
Not yet as the lenders we work with will be working on their changes starting the 15th of this month. However, you should contact us today because when this is completely rolled out you’ll want to act fast as loan applications should increase significantly.
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