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