Friday, August 5, 2011

Not sure what your options are if you are behind on your mortgage or unable to pay?

Summer/Fall 2011 : The Complete HARP / Making Home Affordable Eligibility Requirements

The Home Affordable Refinance Program (HARP) has been extended through June 30, 2012.

If you're underwater on your conforming, conventional mortgage, you MAY be eligible to refinance your home without paying down principal or having to pay mortgage insurance.

More people are eligible than you might otherwise think.

Get a HARP refi quote now.
What Is HARP?

HARP goes by several names. I use the blanket name HARP because that's what the government calls it. The program is also known as the Making Home Affordable plan, the Obama Refi plan, and Relief Refinance.

First: Of primary import are these two points:

Only Fannie Mae- and Freddie Mac-backed loans are HARP-eligible
Your current mortgage must have a "securitization," meaning it had to have closed, date prior to June 1, 2009

If you don't meet these two criteria, you are HARP-ineligible.

HARP : Questions and Answers
How do I know if Fannie Mae or Freddie Mac has my mortgage?

Both Fannie Mae and Freddie Mac have posted "lookup" forms on their respective websites. Check Fannie Mae's first because Fannie Mae's market share is larger. If no match is found, then check Freddie Mac.
If my mortgage is held by Fannie Mae or Freddie Mac, does that mean I'm instantly eligible for the Home Affordable Refinance Program?

No. There is a series of criteria. Having your mortgage held by Fannie or Freddie is just a pre-qualifier.
Is "HARP" the same thing as the government's "Making Home Affordable" program?

My mortgage is held by Fannie/Freddie. Now what do I do?

Find a recent mortgage statement and write "Fannie Mae" or "Freddie Mac" on it -- whichever group backs your home loan. You'll need this information because the Home Affordable Refinance Program is slightly different which each entity. Next, you'll want contact a loan officer about starting your HARP refi.
What if neither Fannie Mae nor Freddie Mac has a record of my mortgage?

If neither Fannie nor Freddie has record of your mortgage, your loan is held somewhere else and is, therefore, HARP-ineligible. You may still be eligible for a "regular" refinance to lower rates, however. Use this form to get a rate quote or use a competing bid service like LendingTree Mortgage Loans.
Am I eligible for the Home Affordable Refinance Program if I'm behind on my mortgage?

No. You must be current on your mortgage to refinance via HARP.
Will the Home Affordable Refinance Program help me avoid foreclosure?

No. The Home Affordable Refinance Program is not designed to delay, or stop, foreclosures. It's meant to give homeowners who are current on their mortgages, and who have lost home equity, a chance to refinance at today's low mortgage rates.
What are the minimum requirements to be HARP-eligible?

First, your home loan must be current. You may not be delinquent or behind in your payments. Second, you can't be more than 25% underwater on your home. Officially, this is known as having a 125% loan-to-value. Third, your mortgage must have been originated and sold to Fannie or Freddie prior to June 1, 2009.
How do I know if my mortgage exceeds the 125% loan-to-value?

Take your the balance of your first mortgage and divide it by the value of your home. This is your loan-to-value.
Do I need to refinance with my current lender?

No. With the Home Affordable Refinance Program, you can refinance with any participating HARP lender. Apply here online for a rate quote.
I put down 20% when I bought to avoid paying mortgage insurance. Will I have to pay mortgage insurance now because of my HARP refinance?

No, you won't. If your current home loan doesn't require private mortgage insurance, you won't have to start paying it on your new home loan.
I pay PMI now. Will my PMI payments go up with a new HARP refinance?

No, your private mortgage insurance payments will not increase. However, the "transfer" of your mortgage insurance policy may require extra steps. Remind your lender that you're paying PMI to help the refinance process move more smoothly.
What's the biggest mortgage I can get with a HARP refinance?

HARP refinances are limited to the lesser of 125% of the home's value, or the area's conforming loan limits. In most cities, the conforming loan limit is $417,000. However, there are some cities in which conforming loan limits are as high at $729,750. You can lookup your area's conforming loan limits by clicking here.
Can I do a cash-out refinances with HARP?

No, only rate-and-term refinances are allowable according to the Home Affordable Refinance Program guidelines.
Can I refinance an investment/rental property with HARP?

Yes, you can refinance an investment/rental property with HARP, but only if the home was originally financed as an investment property. You can't HARP-refi a home that was originally a primary residence and is now considered a rental.
Can I refinance a second/vacation home with HARP?

Yes, you can refinance an second/vacation property with HARP, but only if the home was originally financed as an second/vacation property. You can't HARP-refi a home that was originally a primary residence and is now considered a second home.
Can I consolidate mortgages with a Making Home Affordable refinance?

No, you cannot consolidate multiple mortgages with the HARP refinance program. It's for first liens only. All subordinate/junior liens must be re-subordinated to the new first mortgage.

Can I "roll up" my closing costs into a Making Home Affordable refinance?

Yes, mortgage balances can be increased to cover closing costs in addition to other monies due at closing such as escrow reserves, accrued daily interest, and a small amount of cash. In no cases may loan sizes exceed 125% of the home's value, nor may they exceed the local conforming loan limits.
I am unemployed and without income. Am I HARP-eligible?

No. Income verification is required in the HARP refinance program.
My original mortgage was a stated income loan. Will my income be verified with a HARP refinance?

Yes, with HARP, applicant income is verified in the same manner as with a traditional refinance -- via a combination of W-2s, pay stubs, tax returns and other, underwriter-requested documentation.
What are the HARP program's mortgage rates?

Base mortgage rates for the HARP program are the same as for a "traditional" refinance. Loan-level pricing adjustments may apply.
Is there a minimum credit score to use the HARP program?

No, there is no minimum credit score requirement with the HARP refi program, per se. However, you must qualify for the mortgage based on traditional underwriting standards.

Do I have to refinance my mortgage with my current mortgagee (sounds wrong buy when you take out a mortgage you are the mortgager and your "lender" is the mortgagee) servicer?

In most cases, no.
What does the term "DU Refi Plus" mean?

"DU Refi Plus" is the brand name Fannie Mae assigned to its particular flavor of the HARP program. "DU" stands for Desktop Underwriter. It's a software program that simulates mortgage underwriting. "Refi Plus" is a gimmicky-sounding term that could have been anything. The name has been trademarked, however. As an aside, Freddie Mac is using the branded name "Relief Refinance".
Can I remove my spouse or a co-signer with a HARP refinance?

Maybe. HARP guidelines specifically prohibit removing a signer from the note, but there are circumstances in which you can remove a co-signer from the mortgage and from the deed so that the former co-signer has no ownership interest in the home. If that's not possible, to remove a spouse (or co-signed) from the mortgage, a traditional refinance is required.
For how long should I lock my mortgage rate via the HARP Program

Lock for 45 days, at minimum. This is because the HARP program, while streamlined for simplicity, still has some grey areas that can lead to delay. It's better to have a rate lock that lasts too long than not long enough.
How do I apply for the HARP program?

Apply For Home Affordable Refinance Program

If you're ready to apply, click here to generate an online quote. Or, if you have a specific HARP question, send me an email and I'll do my best to give a good reply.

Lastly, don't forget! The Home Affordable Refinance Program is not meant to save a home from foreclosure. It's meant to give underwater homeowners a chance to refinance without paying PMI.

If you need foreclosure help, call your current loan servicer immediately.

If you are not eligible to refinance your home mortgage, then we would probably talk about your other options as there are primarily two: Short sale your home or allow it to foreclose.

Foreclosure is the most severe and will impact your credit for a good 7 years according to most experts; whereas, a short sale will impact your credit for 2-3 years. So, if you are going through a rough spot and expect to get back on track and prefer to own a home and take advantage of the favorable tax incentives of ownership, you should push for a pre-approved short sale.

If you are unemployed and have no prospects of landing a job and an significant accumulation of debt on top of your mortgage, i whole-heartedly recommend you consult with a bankruptcy attorney to explore your options.

If you want to have a discreet conversation, please feel free to call me at 917.797.5059 as I am SFR-Short Sale and Foreclosure trained.

Mark Slade
Keller Williams

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