By JoAnn Young - Owner / Principal Broker - Peoples First Financial Services.
Recently,I mailed my customers in my database a postcard with news about the new HARP 2.0 for homeowners that are currently underwater on their mortgages. Several have called and asked about the program guidelines so I decided to post a note here for more explanation.
HARP 2.0 provides much needed relief to underwater borrowers who have been making their payments and who have stayed in their homes but unable to refinance due to lack of equity in their homes. Note: This type of loan does not excuse any of your current balance. The current full 1st mortgage balance is refinanced plus closing costs if you decide to roll them in.
Please keep in mind that the HARP program is OPTIONAL for banks to participate. Not all banks are offering the program and the banks that do participate add to or restrict the guidelines that the government has laid out or have made the cost so hih that it makes no sense to refinance.
The primary changes to HARP are the reduction of pricing adjustments (points) on all HARP loans which allows borrowers to save more money than they could have before and the ability to not require appraisals on many loans. Also allows homeowners to refinance any amount over 80% financed with no limits.
The guidelines I am posting are from a combination of mortgage lenders that I currently have a wholesale lending relationship with who has the closest HARP guidelines to the government's program.You do not have to go through your original bank or lender for this program!!!
1. First, you must find out if you current loan is owned by Fannie Mae or Freddie Mac. Go to this link and type in your information: Fannie Mae. or here Freddie Mac If you think your loan is owned by Fannie Mae or Freddie Mac and you get a message that your loan is not eligible, call me.
2. Your current loan to value if over 80% now excludes any second mortgages -they don't count anymore! This cap will be lifted in the third week of March of 2012. If you have a second mortgage, you must request the second mortgage lien holder to remain in second place (re-subordinate).
3. You cannot have any late payments on any mortgages in the last 12 months. Some lenders will accept 6 months depending on the credit score.
4. HARP 2.0 can be used for Primary Residence, Investment Properties and Second Homes. My wholesale lender will also accept CONDOS! But condos only up to 125% & it must be a primary residence condo.
5. You and a Co-Borrower (if applicable) must have a minimum credit score of 640. Out of the three credit bureaus, it is the middle score.
6. Income must be fully documented. W-2's & paystubs. If self-employed then tax returns also.
7. If your current loan started with or now has mortgage insurance, there are certain circumstances where the mortgage insurance can be transferred and you can still qualify.
8. In some circumstances, a short sale or foreclosure will be accepted by FNMA as long as the credit score is strong. (In most cases it is where the borrower is reducing his term. i.e. from 30 years to 20 years.)
9. If the value is stated onthe loan application properly, FNMA will not ask for an appraisal for this product. Saves you even more money! (Approx. $400)
Interest rates are great for this program right now!
Now, who wants to refinance???
Contact JoAnn Young - direct line 321-243-4917 or email me JoAnn@PeopleComeFirst.net and let's get started saving you some money!
