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HARP Refinance Program Extended and Expanded December 1st, 2011

FHFA, Fannie Mae and Freddie Mac announce HARP changes yesterday that should be great news for an expected millions of homehowners nationwide.

HARP Refinance Program Expanded

The new program enhancements address several other key aspects of HARP including: my “english interpretation is in italic

  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and lowering fees for other borrowers;

lower fees will probably follow a fixed fee model. I actually like the fixed fee option most as a consumer. Also, it sounds like there will be even greater reduced fees fro folks going from a 30 year fixed to a 15 year fixed. Mortgage insurance is almost nothing at 15 years.

  • Removing the current 125 percent LTV ceiling for fixed-rate mortgages backed by Fannie Mae and Freddie Mac;

Ok, this is the big one. The thought behind giving this program in the arm is that many folks are above the 125% threshold. This is most certainly a great move for Californians.

  • Waiving certain representations and warranties that lenders commit to in making loans owned or guaranteed by Fannie Mae and Freddie Mac;Eliminating the need for a new property appraisal where there is a reliable AVM (automated valuation model) estimate provided by the Enterprises; and

This is actually a pretty big deal. Basically, lenders are going to have less exposure to liability when originating these loans. This is fantastic news! I can’t tell you how many Government programs have completely failed because there wasn’t enough participation because of risk and liability. Glad they got this one right…well, we’ll see what they come up with. Stay tuned as lenders ramp up to offer these programs to homeowners.

  • Extending the end date for HARP until Dec. 31, 2013 for loans originally sold to the Enterprises on or before May 31, 2009.

This hasn’t changed, your loan has to be owned by Fannie Mae or Freddie Mac on or before May 31, 2009. What has changed is the sunset of this program has been extended to December 31, 2013.

Step 1: Basic Qualifying Guidelines

In general, borrowers must meet the following criteria:

  • The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
  • The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
  • The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
  • The current loan-to-value (LTV) ratio must be greater than 80%.
  • The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

All guidelines are not released yet – to get special updates about this program, get on our early alert update here.  We’ll publish updates as they are released.

Step 2: Is your mortgage owned by Fannie or Freddie?

Fannie Mae lookup – Is your mortgage owned by Fannie Mae?

Freddie Mac lookup – Is your mortgage owned by Freddie Mac?

Step 3: Apply on or After December 1st, 2011

Questions or comments?  If you have a question, you can either call, chat, email or leave your question below.

In case you need some good bed time reading, here’s the FHFA press release from Monday, October 24, 2011

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4 Responses to HARP Refinance Program Extended and Expanded December 1st, 2011

  1. John Madrid December 13, 2011 at 7:56 am #

    Scot,
    Thanks for the informative articles. I had a rental that eventually went into foreclosure. The deadbeat renters took $1,500 in legal fees to get them out after a year of non payment of rent. The house was originally my primary residence. At the time I was married. My mother who was 85 years old lived with us. The mother in law had a bad turn fro her health and needed a more temperate climate, hence we moved from Wildomar hot in the summer and cold in the winter) to San Diego. Shortly after that we got divorced. Two reasons, health and divorce. I contacted the lender numerous times requesting a loan modification. They said that I was a teacher, good income of $75,000, the property was now a rental and didn’t qualify. I contacted them while THE HOME WAS STILL MY PRIMARY RESIDENCE. I contacted the Fair Housing Authority in Sacramento and filed a complaint. The lender had my loan insured. Why would they want to modify my loan and take a loss? I am currently employed ($78,000/year)as a teacher. My credit scores are 683-688-695. Is there a vehicle other than hard money, conventional loan that I could get? What about FHA?
    Thanks,
    John

    • Legacy Content December 13, 2011 at 1:14 pm #

      Hi John,
      I’ve asked Alissa Alvarez to contact you about getting more information about the timelines here. FHA is by far the quickest path to buying again. Here’s an article I wrote about the waiting periods – http://broadviewhome loanorange.com/home-buyers/buy-again/how-long-do-i-have-to-wait-after-a-bankruptcy-short-sale-or-foreclosure/

      Hope this helps?

  2. john October 25, 2011 at 7:56 am #

    Anything on the horizon to help the millions of homeowners who do not have GSE loads?

    • Legacy Content October 25, 2011 at 10:53 am #

      Hey John,
      FHA, VA and USDA already have streamline loan programs. I seriously hope that there is enough lender participation to make the HARP program a success. Maybe after that, they will look to model a loan overhaul lifting the loan to value limits for Government loans too.