HARP 2.0 - New FNMA/FreddieMac Mortgage Relief Refinance program released

Participating Lenders are scheduled to start funding  qualifying loans March 17, 2012.

Basic refinance criteria: 

1. First Trust Deeds for the most part. Junior Liens should subordinate.
2. Any LTV / CLTV (Lender may have overlays).
3. Maximum Debt to Income "DTI" ratio 45%. (A big hurdle for those who have been struggling).
4. Zero late payments in past 6 months. Only 1 late in past 12 months allowed.
5. The loan must be backed by Fannie Mae or Freddie Mac.
6. Current mortgage must have been originated prior to June 1, 2009.  
7. Original loan amount $417,000 or below.

Notes: Investors/lenders may impose stricter criteria. This is an optional program and most banks are not participating.  I have heard of pressure on the adminsitration to stall or forgo the program due to banks natural desire to not allow everyone to reduce their rates and bank profitability on less than perfect loans with high risk attributes. May be a downward spiraling problem.

Question and Answers

1) How do I know if Fannie Mae or Freddie Mac has my mortgage?  They have "lookup" forms on their websites.

       FNMA: http://www.fanniemae.com/loanlookup/

       FREDDIE: https://ww3.freddiemac.com/corporate/

3) Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage? No.  No late payments in the past 6 monhts. 

4) If I refinanced with HARP a few years ago, can I use it again for HARP 2? No. One time only. 

5) I am severely far underwater on my mortgage. Can I use HARP? Yes. No LTV restriction now.
6) Is  mortgage insurance required for LTV 's greater than 80%. Only if the loan currently has MI.

7) Can borrower(s) be removed through the refinance transaction? Yes

8) Is any "cash out" allowed on the refi? No. However you can include typical closing costs and impounds required. Or, if you can get lender paid closing cost credit even better. 

9) Can I include my 2nd Td/HELOC? No. However 2nd TD lender may subordinate, as they are now to be "indemnified against future losses". Most lenders will co-operate ....but will restrict the increase of the 1st to just 10%....which should be acceptable. Many of the big four banks have huge 2nd TD portfolios that will be protected by guarantees under the new programs if they complete the HARP 2.0 refinance.

10)  Are the rates at current market lows?  They are a little over current market. And can be affected by low credit scores.

11)  Does this program cover investment property? Yes. LTV limited to105%.

12) Is an appraisal required? No, but may require property condition "inspection". Borrowers with marginal credit scores AND high debt ratios MAY be required to have "appraisal". But the "appraisal" is simply a housing inspection to determine the CONDITION of the property.

13)  What are the terms of the loan(s)? 30, 20, 15 yrs.  

 Summary comments:
In addition, you are advised to only work with knowledgeable and highly experienced mortgage loan officers or brokers. These can be complex, and you want to ensure a reasonably smooth process and likelihood of success if you are to spend the time to do one.

 Borrowers are encouraged to apply now. To register your loan request and get pre-approved quickly go to our proprietary home loan automated underwriting system at www.ePrequal.com .
By answering a few simple questions, you will be run through our loan prequalification system and registered to begin the application process. One of our Senior Loan Officer will contact you within an hour to discuss your situation.

Dave Van Waldick
Western Mortgage (a subsidiary of Western Realty Finance / nmls#345616)

Off/Cell: 760-599-1261

PS: "As Home Ownership Experts, we provide an integrated suite of strategic financial solutions."

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