To be eligible for the HARP refinance, your mortgage must still be either owned by Fannie Mae or Freddie Mac.
Please check here:
Freddie Mac
Fannie Mae
Home Affordable Refinance Programs --
Freddie Mac Relief Refinance Mortgage and Fannie Mae DU Refi Plus
HARP has been available to borrowers with Fannie Mae or Freddie Mac loans since the first inception of HARP. Theoretically, Fannie or Freddie borrowers are currently eligible for a HARP loan as long as their first mortgage loan-to-value "LTV" does not exceed 125%. Unfortunately, I have searched high and low with dozens, if not hundreds, of Fannie Mae and Freddie Mac funding sources and none of them will go to 125% LTV. Lenders may apply--and most do apply--underwriting overlays to lessen their risk on Fannie and Freddie underwritten loans. 105% LTV is the maximum I have located with those funding sources that are participating in HARP. It is not mandatory for a lender to participate. I have heard that, if you approach your current Fannie Mae or Freddie Mac lender/servicer, you may qualify for 125% LTV if your lender is participating in HARP. The key here is "if they are participating". Good luck.
Details of the new HARP II program are due out November 15th. Here are the expected "enhancements":
1) Removing the current 125% loan-to-value ceiling on fixed rate refinanced mortgages.
2) Waiving risk-based fees on borrowers who take shorter term mortgages and reducing those fees for others.
3) Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by Fannie Mae and Freddie Mac.
4) Extending availability of the program through the end of 2013.
All of the above sounds great in theory. However, since few, if any, lenders are going to 125% LTV now, what are the chances they will go over that without the cap? I am not holding my breath.
A few other tidbits about HARP loans:
A) You can only do a "rate/term" refinance of your Fannie of Freddie loan - so, no cash out for any reason (you can, however, cover costs in new loan amount).
B) You cannot pay off a 2nd mortgage with the new HARP loan. Your current 2nd lender must agree to subordinate (moving to 2nd position) behind the new HARP loan. This adds time and costs to the process.
C) If your loan has mortgage insurance "MI" now, it is next to impossible to refinance to a HARP loan.
D) If your loan does not have MI now, no MI is required on the HARP loan.
E) Rates and fees are higher on HARP as compared to typical Fannie or Freddie rates--and increase with LTV, credit scores, etc. That may change slightly with #2 above.
F) You still must qualify with a a clean mortgage payment history and demonstrated earnings abililty to repay debt.
G) If your loan now does not have MI, yet you have a bit less than 20% equity, you might benefit from a HARP loan--NO MI is required, unlike traditional loans with LTV's over 80%.
Some of you may benefit with this new HARP program by lowering your monthly payments. Unfortunately, you will still be upside down on equity. Will HARP help the economy? You tell me. HARP doesn’t address the massive majority of home owners that do not have loans owned by Fannie or Freddie. HARP also does little to keep borrowers from walking away from their negative equity. Consequently, short sales and foreclosures probably will not be dampened.
Please contact me for a free analysis of your current home loan, or if you would like a real home valuation Broker Price Opinion "BPO" at no cost.
