HARP 2 Mortgage Refinance Roll Out

by Anu in VA, David in FL, Annette in FL, CEM in CA, Donna in FL

Ask Kate answers HARP 2.0 mortgage refinance roll-out questions: An estimated 11 million mortgages are underwater. Yet only a fraction have been refinanced. With apparent lender reluctance to "give away the house", homeowners must be tenacious. I'm considering a HARP 2.0 Hall of Shame for a couple of lenders. Here's the roll-out so far on Day One.



Ask Kate continues... Tell me what you think after reading the following questions. Please comment on your HARP refinancing progress. At the bottom of this page, you will see links to comment and Ask Kate.

1. Denied for no downpayment on original loan... Hi Kate, We were denied for HARP 2.0 refinancing because of something called a credit enhancement by Fannie Mae underwriting software.

They said we're denied because our original loan was 100% financed with no down payment. We couldn't see any clause like this in HARP 2.0 eligibility guidelines. Do you have any idea if that's the case? Thanks. Anu in Centreville, VA

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Ask Kate answers: Hi Anu, That's a new one for me as well. Their response makes me want to create a HARP Hall of Shame.

Try a few other lenders since some participating mortgage companies are overlaying Fannie Mae guidelines with their own requirements. Now that HARP 2.0 has evened the playing field between loan servicers and other lenders, you are more free to shop.

I also recommend calling a HUD counselor to discuss this at 888-995-4673. There is no charge and you have nothing to lose but your time. They are available 24/7 so call during non-peak hours.



2. Maximum LTV... Hello Kate, I've just read your blog and proceeded to a lender. However, in spite of the new HARP guidelines eliminating the cap on LTV (mine's not so good), the system said I wanted to borrow too much for the home's value. Confused. Please advise. Many thanks, David in Lake Worth, FL

Ask Kate for HARP 2.0 loan refinance help
Ask Kate answers: Hi David, Was this an automated self-entry system? If so, it probably hasn't yet been updated.

But the fact remains, the limit on loan-to-value has been eliminated by Fannie Mae and Freddie Mac if you are refinancing into a 30 year (or less) fixed rate mortgage.

Either this lender is overlaying HARP 2.0 guidelines with stiffer requirements or hasn't adequately prepared for the new wave of refinancing requests.

You can see how many homeowners with underwater mortgages need to refinance just by the amount of Ask Kate questions I receive regarding the Making Home Affordable programs.



3. Refinancing my underwater condo with HARP 2... Hi Kate, I am in the process of refinancing my condo, had to do an appraisal and now I have to get a condo survey done.

If the condo association does not meet the requirements of the survey, I don't get to refinance my property. Please explain why a survey is needed. Annette in Kissimmee, FL

Ask Kate Empowering Homeowners - Your Home Your Mortgage
Ask Kate answers: Hi Annette, I wish I could explain!

Fannie Mae updated their FAQs for underwriting of condos on March 15, 2012 for HARP 2.0:

1. Manual underwriting (loan servicer) - No new project review, no confirmation of insurance is required.

2. Automated underwriting (any participating lender) - No further review is required, except to confirm adequate insurance coverage and that the unit is not in a condo hotel.

Another Ask Kate condo question and answer: HARP 2 Condo Refinancing.



4. HARP Program... Kate, I have been searching for a lender who participates in the HARP program and am not able to find one who seems to know much. I was told by one lender that I could only do a 20 year and not a 15 year.

Another said recent changes were just made so all lenders are on hold with program. Each one has a different excuse. I have good scores and do qualify. Donna in Fort Pierce, Florida

Ask Kate for HARP 2.0 loan refinance help
Ask Kate answers: Hi Donna, It's sad, the amount of tax payer funds spent to create a program, overhaul it, and roll it out again, isn't it?

Fannie Mae say that going from a 30 year fixed rate mortgage to a 15, 20, or 25 year fixed rate mortgage meets their HARP 2 standards for Borrower Benefit. It would certainly seem there are options for 15 year terms, right?

So keep calling different lenders. And please report on your progress. If borrowers tell of their success, it will help all of us.

Click here to jump down to the commenting link.



5. HARP 2 Qualifications... Kate, I closed on my home in June 2009, my LTV is currently around 83%, do I qualify for HARP 2? I have not missed any mortgage payments, my interest rate is 4.625%, home value is approx. $705,000. I owe $573,000. No second mortgage or home equity loan. CEM in Glendale, CA

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Ask Kate answers: Hi CEM, In my "Announcement Quick Links" at New HARP 2 Loan Announcement, click on Initial Eligibility. Then you can review the initial eligibility criteria to be considered for HARP.

After that, you will need to find a lender to run your loan application through either Fannie Mae or Freddie Mac software to get an approval and tell you of any loan conditions.

(And by the way, HARP 2 has no combined loan-to-value limit when a homeowner has a second mortgage.)

Click here to jump down to the commenting link.

Best refinancing wishes to homeowners,

Ask Kate

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Removing Ex-Spouse During HARP Refinance
by: Chris from California

I am now divorced. I want to remove my ex-spouse from the mortgage and add my new spouse as a borrower. Can I do that with HARP? My new husband is currently on the Property Title after ex was removed.

Hi Chris, Kate here...

Yes, you should be able to remove your ex from the mortgage and add your new spouse while refinancing with HARP.

Best wishes, Kate

HARP 2 and PMI
by: Anonymous

Help! How does refinancing effect how long you pay PMI? Are we starting to build equity all over again?

Original Loan 2007 for $180,400:
80 percent equity in 2017
5 percent down

New Loan HARP:
Principal balance $169,000
Appraisal $169,000
New loan amount $177,000 including closing costs.

So would PMI end around 20 percent of 169,000 or 135,200 in equity or is it still based off the original loan amount?

It looks like I would be paying $6,000 more in PMI with a refinance? HELP! The mortgage guy has no idea.

Hi, Kate here Terms of your HARP refinance will be used to calculate the private mortgage insurance cancellation or termination date.

Go to How Do I Cancel PMI for the standards regulating the removal of PMI. I also spell out the difference between mortgage insurance cancellation and termination!

Moral of the story, make sure if you have existing mortgage insurance that your HARP 2.0 refinance is going to actually save you money.

Best wishes, Kate

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