New HARP 2 Condo Refinancing

by T. Blaine from Ohio

Ask Kate about new HARP 2.0 condo refinancing: Hi Kate, We own a condo in Florida that is an investment property (ha...). We are refinancing under HARP II. Do we have to go with the original bank? I've been told that because we are so underwater, we have to go with the original Big-Box Lender as no one else is required to take this on.

T. Blaine continues... We owe $117,000 on the original loan. I believe the place is appraised around $80,000. What sort of rates and fees should I expect? This is a multi-unit condo in Florida.

I'm out of state, and it is classified as an investment property. (It was a second home until my tenant answered the door when the banks appraiser came... doh.)

I'm currently looking at a 4.89% interest rate (paid down to 4.625% for a charge). I'm being charged approximately $8,300 (which includes $1062 for escrow, and the $2,145 buy down of the interest rate per the recent adjustment from second home to investment.)

Any thoughts or advice are very appreciated! Feeling a little trapped by Big-Box Lender and "their way or the highway" attitude at the moment!

Kate Answers: New HARP 2.0 Condo Refinancing

Ask Kate at
Dear T. Blaine,

You have a way with words. Thanks. I needed a chuckle this afternoon.

But I'm sad to hear of your condominium's loss in equity. However, there is no such thing as TOO FAR UNDERWATER with the new HARP 2.0 for fixed rate mortgage refinances with terms up to 30 years.

Or here's another way to say it! The loan-to-value (LTV) cut-off for fixed rate mortgages with terms up to 30 years is... oh, that's right. There isn't one.

Not convinced? The new HARP 2.0 guideline could also be worded like this: For fixed-rate mortgage loans with terms up to 30 years, for all occupancy and property types, there is no maximum LTV ratio!

So what is all this DU Refi Plus vs manual underwriting (Refi Plus) talk?

Here's why there has been so much confusion since the first HARP 2.0 announcement in October 2011...
  1. Only your loan servicer has been able to manually underwrite (Refi Plus) your refinance with the new HARP 2.0 guidelines.

  2. Other lenders who do not service your mortgage have been restricted to approving your HARP refinance using Fannie Mae's Desktop Underwriting (DU Refi Plus) software and Freddie Mac's equivalent.

  3. Because the software has not yet been fully updated with the new and improved guidelines, servicing lenders have been better equipped to take advantage of the more relaxed requirements of HARP 2.0 loans.
But the week-end of March 17, 2012, marks the date of the underwriting software finally being updated with HARP 2.0 guidelines.

HARP 2.0 Refinance Updates

The HARP program has been extended through December 31, 2016! Go here for an overview of the HARP 2.0 Program.

Make your voice heard to Congress! How to contact Washington DC about the HARP program.

That's why the pending announcement is so promising! All participating HARP lenders will have access to updated underwriting software reflecting the guidelines of the new HARP 2.0 loan.

Okay, enough shop talk. Let's get on to answering your questions.

I've been told that because we are so underwater, we have to go with the original Big-Box Lender.

As I said earlier, if you are applying to refinance under HARP 2.0 for a fixed rate mortgage of 30 years or less, there is no loan-to-value criteria.

What sort of mortgage rates and fees should I expect? This is a multi-unit condo in Florida.

Mortgage rates for HARP are priced by individual lenders just like a traditional refinance. There is no such animal as a published HARP 2.0 interest rate.

But Fannie Mae has removed LLPAs (loan level pricing adjustments) and AMDCs (adverse market delivery charges) for HARP 2.0 owner-occupied refinances with terms of less than 20 years. Minus the lingo, this means some HARP 2.0 loans could cost even LESS than traditional refinances.

So I recommend shopping and comparing the mortgage rate and closing cost quote you already received from "My Way or the Highway" Big-Box Lender, regardless of your condominium being owner-occupied or not.

How can I keep track of and compare today's mortgage rates?

Here is how I can help you keep track of mortgage rates and trends. At the end of each week, I announce average mortgage rates across the nation. It's an easy way to compare rates and track ups and downs at a glance.
Access current mortgage rates and trends at the Best Mortgage Rate Blog. Bookmark my blog for an easy return.
Good luck, best wishes, and don't forget to check in here on and before March 17 (and afterward for that matter) for HARP 2.0 breaking news.

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