Gluttonous HARP 2 Mortgage Closing Costs

by Michael in San Francisco

Ask Kate about gluttonous HARP 2 mortgage closing costs: Hi Kate! I like your website. It's very informative. I'm a real estate investor with a hangover. I'm trying to get one of my legs out of the bear trap of owning too many Single Family Investment Homes. I am trying to short sale three homes and looking to use Harp 2.0 to refinance and lower monthly payments on two other properties I own, one in Texas and one in Louisiana.


Michael continues... I talked to the bank who services one of the loans about Harp 2.0 refinance and they want $395 application fee upfront. The $2000 'processing fee' can be rolled into the loan.

What kind of application fees from Lenders can we expect to close this type of loan? These application fees don't really guarantee much of anything.

My once 750 credit score has taken a hit, with the short sales in process. But paying the $395 sort of commits me to following through since the only other alternative is to find another Lender and pay their application fee.

What are you seeing in the marketplace about keeping HARP program rates and mortgage fees down in closing these loans. Michael P.

Kate Answers: Gluttonous HARP 2 Mortgage Closing Costs

***zz-portrait-left.shtml*** Dear Michael,

While homeowners wistfully dream of affordable monthly mortgage payments, a handful of big banks seem to be drooling over bigger and better ways to increase their revenue.

We have to make sure there is an end in sight to the appetite of some big banks.

HARP 2 Refinancing Costs

You should know this! Fannie Mae eliminated their loan level pricing adjustments (LLPA) for HARP 2 owner-occupied loans with terms no greater than 20 year terms. For terms over 20 years, loan level pricing adjustments are capped at .75%.

Compare this to a 2% cap for traditional refinancing.
In plain language, loan level pricing adjustments (LLPA) are steep fees that result in higher mortgage rates.
What this means is that HARP 2.0 mortgages should cost less than than traditional refinancing!

Free Your Leg from the Underwater Mortgage Bear Trap

But the Senate has recently raised concerns that much of the HARP 2 mortgage originations are going to big banks who, with a lack of competition, have developed a gluttonous appetite for charging struggling homeowners.

So what can borrowers with underwater mortgages do to get the best HARP interest rate at the lowest cost? To use your words, here is how to get your leg out of the bear trap!

Make a pledge to yourself that you will do the work to:

HARP 2 Processing Fees

Michael, I hope you are not encountering additional closing costs of significance on top of that $2000 processing fee, besides the $395 application fee.

Otherwise, in my opinion, that would be gluttonous on the part of the bank.

One last thought. While the Senate is concerned over a lack of lender competition, write your representatives in the government. Put pressure on your elected officials to make HARP 2 more available and affordable to homeowners with underwater mortgages.

It's your mortgage and your home. You deserve the best!

Good luck with sniffing out the best HARP 2 lenders,


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