HARP 2 Embraces No Income Guidelines

by Patty from Michigan

HARP 2.0 refinance embraces no-income guidelines: No income got you turned down for HARP? Did your refinance hit a brick wall over large deposits? Can't remove your ex-spouse from an underwater mortgage? September 2012, Fannie Mae and Freddie Mac announced reduced documentation for Making Home Affordable Refinance Plan! Semi-retired Patty from Michigan will love this news.


Patty asks Kate what to do when her HARP 2.0 refinance hits a brick wall... About 15 months ago I semi-retired and changed to a part time job with the same company where I've worked for many years.

HARP 2 Embraces No Income Guidelines
I have no debt other than the mortgage and my credit score is excellent.

I asked my current mortgage lender about refinancing and they said they could not do it due to new Fannie Mae guidelines regarding part time work and I must show 2 years of W-2's. That will mean waiting over a year.

I really don't want to shop around a lot and have all those hits getting my credit score. I'd love to save some money on those house payments. What to do?

Kate Answers: HARP 2 Refinance Embraces No-Income Guidelines and Reduced Documentation

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

How I love to report good news about improvements on the lending front!

Just recently, Fannie Mae and Freddie Mac reduced HARP 2.0 income documentation requirements.

This means if you have been turned down for lack of income, you may be able to get HARP 2.0 loan approval now. The same holds true if your mortgage request was denied for unexplainable large deposits (you could be so lucky) or needing a co-borrower off the mortgage (think ex-spouse).

Here are the details.

HARP Embraces No-Income Guidelines

Retirees rejoice! No documentation of income is now required if you can demonstrate 12 months of the proposed mortgage payment (including taxes, insurance, and association dues) in checking, savings, stocks, or retirement accounts.

So start scraping together every last dime until you have compiled verification of 12 months PITIA. (Apparently the "A" was tacked onto principal, interest, taxes, and insurance to address homeowner's association dues.)

Mysterious Deposits Okay

Large deposits on banking statements no longer require verification. So if you are lucky enough to discover a $10,000 deposit in your bank account, Fannie and Freddie quit insisting that lenders document the asset's source.

Removing a Mortgage Co-Borrower

It has been an unbelievable hassle to convince an underwriter that removing a co-borrower will not drive the remaining borrower straight into foreclosure. Homeowners in this situation may now qualify on their own having debt-to-income ratios below 46% and credit scores above 619, without producing enough paperwork to destroy a forest.

You know what I mean if you've tried this before!

Give HARP 2.0 Refinancing Another Go

So if your HARP 2.0 refinance hit a brick wall due to any of these three scenarios, run, don't walk, back to your lender today! The opportunity to refinance underwater mortgages is bound to disappear eventually. Take advantage of the Making Home Affordable Program with reduced documentation requirements while it exists!

Good luck and best wishes,


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