Freddie Mac Making Home Affordable HARP 2 Refinance

by Cheryl in Long Beach, CA and by Kristina in Los Angeles, CA

Ask Kate about Freddie Mac Making Home Affordable HARP 2 refinance: Cheryl asks if her investment property falls under any income requirements? Will there be a debt-to-income threshold? Kristina's Freddie Mac loan is with Bank of America but a lender told her HARP guidelines (not their own) restrict them to Freddie Mac with Chase. Confusion!

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Freddie Mac HARP 2.0 Refinance Income Requirements for Investment Properties

By Cheryl in Long Beach, California

Hi Kate. I have read several articles regarding the HARP 2.0 income requirements. For instance I read that there is no maximum debt-to-income ratio (DTI) except when principal and interest payment of the new refi is greater than 20%.

I currently have a Freddie Mac loan (originated in 2007) with LTV of 135% at 7.3%. This is a rental property and my mortgage service company is IndyMac.

Under the new HARP 2.0 guidelines, will I fall under any income requirements? Will there be a DTI threshold?

In order not to have a required DTI, will I be required to use my original service company IndyMac? Thank you for your assistance!

***zz-portrait-left.shtml*** Ask Kate answer: Hi Cheryl, Investment properties are eligible for consideration under HARP 2.0.

I can't speak to IndyMac's individual overlays (additional requirements). But under HARP 2.0 guidelines, if the monthly principal and interest portion of the payment is going up more than 20 percent, re-qualification is necessary under manual underwriting.

The debt-to-income ratio will most likely be limited to 45%. Manual underwriting can only be performed by the loan servicer.

But the loan servicer and other participating lenders can also use Freddie Mac's underwriting software. In this case, the underwriter will follow the automated recommendations to approve or deny the loan.

No one can fully anticipate your loan's recommendation until it is submitted to the Freddie Mac's Relief Refinance Mortgage Loan Prospector software.

See Why are HARP 2 Mortgage Lenders Inconsistent for information regarding manual vs automated underwriting and lender overlays.

Best wishes for your HARP refinance,

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HARP 2 Refinance Guidelines for Freddie Mac Chase
Loans

By Kristina in Los Angeles, Caligornia

Kate, I am sooo confused. Currently I am shopping around and getting so many different responses.

This is our situation. We are currently with Bank of America, 6% for 30 years. My mortgage is right around 270K. We are hoping to refinance into a lower interest rate and save some money just like everyone else.

We have never missed a payment and our credit is excellent.

One lender told me today that they cannot do Freddie Mac loans, they can only do Freddie Mac with Chase. I asked if this was their guideline... Response was this was from the Harp Guidelines. Can you tell me if this is correct or not.

***zz-portrait-left.shtml*** Ask Kate answer: Hi Kristina, Count me in as confused also.

Is this a new flavor of HARP, Freddie Mac with Chase?

I would double check this response from the lender with a couple of other mortgage companies. For this very purpose, I posted the partial list of participating lenders published by Freddie Mac.

While it isn't an all-encompassing list, this would be a place to start looking for a new lender who isn't creating HARP 2 flavor of the month.

You will find the partial list of Freddie Mac participating lenders at Does Fannie or Freddie Own My Mortgage.

And please report back with your progress. You can post a comment or go to Ask Kate to ask a new question.

Best wishes for your HARP refinances,

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