Unique New HARP 2 Refinance Plan Questions

by Karen in Gilbert, Tom in Olympia, and more

Ask Kate receives unique and new HARP 2 refinance plan questions! Just when I thought I'd heard every question regarding HARP, I received these 3 questions. How would you handle your lender insisting your loan has lender paid mortgage insurance even though you can prove otherwise? Can you get a HARP refinance without being destitute?

Ask Kate continues: Can you refinance with HARP after a short sale on another property? Here are my answers based on new HARP 2.0 guidelines...

Lender Paid Mortgage Insurance (LPMI) HARP Dilemma

by Karen H. from Gilbert, Arizona

Hi Kate, Your website is wonderful. I just read your HARP 2 information regarding LPMI.

However today, I received conflicting information. I have had a Freddie Mac loan for 11 years. In 2007, I had the PMI removed after meeting the 20% requirement. (This lowered my payment by $60 each month.)

I have tried to refinance this loan since 2009 but am underwater. Knowing that HARP 2 was being implemented, I called again today. However, my bank won't refinance my loan because it still thinks it has lender paid MI.

I had the mortgage statements faxed to me showing the PMI was removed in 2007, I don't understand. What do I do now? Please help me, I feel like I am going in circles. Thanks, Karen H.

Ask Kate: Hi Karen, The banks are swamped and some are cherry picking the easiest Home Affordable Refinance Program applications to process.

1. My guess is that someone glanced at a past record of your loan, saw it was originated with Lender Paid Mortgage Insurance (LPMI) and looked no further.

2. I have heard rumors of large mortgage companies hiring non-experienced originators to handle the onslaught of HARP 2.0 applications.

So taking that into consideration, your challenge will be to get someone to pick up your fax and read the proof that your LPMI has been removed.

But hey! They should be able to refinance your mortgage, even if it had LPMI! Go to New HARP 2.0 Loan Announcement for more information on HARP 2.0 and mortgage insurance.

Can I qualify for a HARP refinance with $30,000 in the bank?

by Tom from Olympia

Hi Kate, We refinanced to a 30 year fixed 4.5% loan 3 years ago. Can I qualify for the HARP program if I have $30,000 in the bank?

What sort of interest rate can I get? Will they reduce my mortgage? Will it make a difference if I go to a 20 year loan? My mortgage is owned by Fannie Mae (or so I was told).

Ask Kate: Hi Tom, Do not confuse HARP with HAMP, a loan modification by Making Home Affordable to prevent foreclosure. HAMP eligibility requires a homeowner to document a hardship.

HARP has no hardship requirement. In fact, HARP is not intended for those in imminent danger of losing their homes by bank foreclosure.

Think of HARP as traditional refinancing without having equity in your home. For instance, the lenders set their own interest rates and mortgage closing costs. Showing a savings pattern and having reserves in the bank is an asset, no pun intended.

Refinancing to a 20 year fixed rate mortgage term will eliminate specific fees. Read about this here: Eliminate Fees with 20 Year HARP Refinance Terms.

Then go to Does Fannie Mae or Freddie Mac Own My Mortgage to double-check what the lender told you!

Can I HARP refinance after a short sale on another property?

by Anonymous

Kate, I sold a property in a short sale a little over 2 years ago. My current home is financed with a loan owned by Freddie Mac. I am being told by various people that I have to wait 4 years after the short sale to refinance.

Is this true? Will I be able to refinance under the terms of HARP 2? I can't find any information online to prove or disprove the information I am being told.

Ask Kate: Although not specifically short sale, I can offer scenarios regarding HARP 2.0 guidelines after loan modification, late mortgage payments, and foreclosure or bankruptcy.

After a HAMP mortgage loan modification through Making Home Affordable, borrowers could still be considered for HARP 2.0 if they meet:

1. Initial eligibility requirements

2. Payment history guidelines

3. Borrower benefit requirements and

4. The hardship leading up to the modification is resolved.

Here are guidelines for borrowers with a bankruptcy or foreclosure in their past.

Discuss these specifically with your HARP loan originator.

Best refinancing wishes to all,

Ask Kate & Comment

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Have You Seen These Ask Kate Answers

• HARP 2 Mortgage Refinance Roll Out Day One
• New HARP 2 Loan Announcement
• After Bankruptcy before Buying a Home
• HARP Refinancing with Lender Paid Mortgage Insurance (LPMI)
• New HARP 2 Condo Refinancing

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