Pam Marron Home Lending

HARP 2.0

HARP 2.0 Refinance Program!

There has been a lot of media attention given to President Obama’s revamped HARP refinance program.  Both Fannie Mae and Freddie Mac have released their updated guidelines for these loans.  Here are the highlights of President Obama’s enhanced HARP program.  Please keep in mind that ALL of the criteria must be met in order to be eligible.

What is HARP 2.0?

HARP 2.0 is a government program that was available March 2012. It allows FNMA/FHLMC underwater homeowners the opportunity to refinance with an unlimited LTV to lower rates, and a shorter term to increase equity. Additional negative equity is incurred with this refinance due to closing costs added.

Who will it help?

Only loans that are ultimately owned by Fannie Mae or Freddie Mac are eligible.  Use the following links to determine if your loan is sold to Fannie Mae or Freddie Mac
Freddie Mac – https://ww3.freddiemac.com/corporate/
Fannie Mae – http://www.fanniemae.com/loanlookup/

What are the criteria to qualify?

Your loan has to have been sold to Fannie Mae or Freddie Mac prior to June 1, 2009 to be eligible.  If you closed on your current loan in May of 2009 or after, your loan may not  have made this cut off.

Will I be required to retain PMI insurance as part of the new loan?

If the loan originally had a down payment of less than 20% and PMI insurance, you will be required to retain PMI insurance as part of the new loan unless you can demonstrate that you now have 20% equity based on a current appraisal.

Will I have to get a new appraisal of my home?

A current appraisal of your home may be required as part of the approval process.  In some cases, the need for an appraisal is eliminated.  The appraisal requirements will vary from borrower to borrower.

What if we have experienced a substantial decrease in home value?

As part of President Obama’s HARP program, homeowners with substantial decreases in value can still take advantage of this program. This is true even if you owe more than what your home is worth.

Is there a limit to the percentage of the home that can be financed?

If you are currently making payments to your mortgage holder, there is generally no limit to the percentage of the home that can be financed.  Example, if you owe $200,000 and your home appraises for $100,000 your loan is essentially 200% of the homes current value.  Under the enhanced program you are still eligible.

For clients who refinance with a “new servicer”, this option will be available in March 2012 if your current loan exceeds 125% of your homes current appraised value. All lenders are awaiting final rules to be published in March 2012. In some cases, borrowers with new loans that are less than 80% of the homes current value that have a home equity loan where the current mortgage is sold to Freddie Mac may have a limit on the amount of the home that can be financed in total

Can I refinance a second mortgage as part of the first mortgage?

Borrowers CANNOT refinance a second mortgage as part of the first mortgage.  The second mortgage holder must be willing to go back into a second lien position in order for a borrower to refinance.