"no closing costs" Re-fi at today's rates according to today's article.
At this time the only thing that people can look forward to is HARP 2.0 which expands on HARP.
This is an idea that tries to take it (HARP) a step further, but please do not count on it.
This new proposal Obama announced today is just that; a proposal. The consensus is that it will never make it past the House and be dead in the water very quickly. "The new effort requires legislation, which means congressional Republicans would have to go along for more homeowners to reap the benefits. One potential problem: the $5 billion to $10 billion plan includes a fee on large banks to prevent it from increasing the federal deficit. The administration has failed to get previous proposed fees through Congress." (The banks will not go for it either.)
I try to avoid politics at all costs, but this feels like political posturing and not much else.
I hope continued programs to assist continue to be discussed, but do not count on this idea coming to fruition any time soon (if at all).
I received notice from Wells Fargo that starting February 6, Wells Fargo will be registering HARP loans under the HARP 2.0 product name.
However, do not get excited yet : "The Loan-to-Value (LTV) enhancement offered by Freddie Mac and Fannie Mae will not be available to the Wells Fargo Wholesale channel until a thorough assessment of the impacts has been made."
Keep in mind that this is just Wells Fargo's latest notice, but it can be seen as an optimistic view that the expanded LTV HARP 2.0 program is getting closer to being available. I have >12 lenders i regularly use and Wells is usually the first to step out with news and the rest follow.
I will continue to update as I receive news.
It has been a couple of weeks and a lot of people asking for updates. Even though the HARP 2.0 guidelines reflect lifting the LTV cap, each lender has their own guidelines and 'overlays' as to what they will offer, Wells Fargo wholesale is registering newly submitted HARP loans under HARP 2.0 but they still have not raised their LTV caps.
I have seen a handful of lenders expand their prior 105% LTV limits to 125%. Each lender is looking at the other to see where they are going and still more time is needed for lenders to come to the plate and go over 125%. March/April is the concensus but we shall see!
From the chatter I am hearing, my sense is we will see a few lenders changing their guidelines in late March and many more in April.
I have wholesale relationships with a multitude of National and Regional lenders and they are all watching each other. Once the first few lenders lift the 125% LTV cap others will follow in suit.
Something new in the bolded area below, the rest of this article is the same ol stuff you all have heard.
The most ambitious federal mortgage program to date aimed at millions of underwater homeowners is poised to take off in the coming two weeks, yet key issues could hinder borrowers’ participation. One of them involves something most owners know nothing about: Who was your mortgage insurer on your underwater loan?
Though it was announced by the Obama administration late last year, the so-called HARP 2.0 — the second version of the Home Affordable Refinance Program — will only hit full stride about the middle of this month, when Fannie Mae and Freddie Mac finish tweaking their automated underwriting systems to accept applications, and lenders and mortgage insurance companies start handling large volumes of requests.
The revisions are crucial for owners who have outstanding mortgage balances in excess of 125 percent of the current resale values of their homes. Under the second version of HARP, there is no upper limit on permissible loan-to-value ratios (LTVs). You can owe twice or even three times the value of your home and still qualify for a refinancing at today’s low interest rates.
The latest HARP also comes with streamlined underwriting — no requirement for physical appraisals in many cases, speedy processing and elimination of some of the deal-breaker fees imposed by Fannie Mae and Freddie Mac in recent years.
The objective, federal officials say, is to get it right this time around by removing the previous obstacles to widespread participation by lenders and severely underwater borrowers. Industry studies estimate that as many as 6.9 million loans could fit the broad requirements for refinancing, but that far fewer — about 2 million borrowers — are likely to qualify.
Only loans owned or guaranteed by Fannie Mae and Freddie Mac are eligible. Both companies’ websites — fanniemae.com and freddiemac.com — offer “look up” features that tell you whether they own your loan.
Your mortgage must have been purchased or securitized by either company no later than May 31, 2009, and must have an LTV ratio in excess of 80 percent.
You must be current on your loan, with no 30-day late payments during the six months preceding application and no more than one late payment during the last 12 months.
If you think you qualify right now, you can apply to your mortgage servicer and ask how to proceed. Once the fully automated program gets going in a couple of weeks and your LTV is higher than 125 percent, you should also be able to shop around among other lenders.
But be aware of a little-noticed glitch that has arisen in the program that could hamper your opportunity to refinance. Some lenders may not want to proceed with your application solely because of a detail buried in your loan documents that was always beyond your control — the name of the mortgage insurer on your current loan. If it is United Guaranty Corp., they may set your application aside because that firm alone has not agreed to adhere fully to the streamlined procedures other insurers accepted as part of the basic deal with the White House, Fannie and Freddie to kick-start the revised refi program.
The issue is technical and complicated — United Guaranty has refused to waive its rights to force lenders to repurchase what it considers badly underwritten loans, and is requiring additional underwriting in some cases. The net effect of United Guaranty’s policy, say lenders and federal officials, is to disrupt the intended fast and efficient processing of HARP refi applications — potentially denying lower interest rates to as many as 10 percent to 15 percent of underwater borrowers who might otherwise qualify.
Some major lenders, such as Quicken Loans, said in interviews that they will have to either set aside or reject HARP applications where the original loan carries United Guaranty insurance. United Guaranty, a subsidiary of giant insurer AIG, said in an email statement that it “fully supports the Obama administration’s efforts” in revising HARP, and that only a “minority” of its insured mortgages should be affected by its policy disagreement with the rest of the industry.
Bottom line for you if you’re deeply underwater and interested in a HARP refi: Proceed with your application anyway, but be aware there are tripwires and snares that could derail you.
I am posting this to better explain and differentiate between the Servicer and who owns the Loan. Many times they are not the same. While you may be making your payments to B of A, Chase, Wells Fargo, Citi, etc., in many cases they are simply handling the Servicing of your loan, and the actual loan may be owned by Fannie Mae or Freddie Mac on the secondary market.
To qualify for a HARP loan your current loan must have been sold to Fannie Mae or Freddie Mac prior to May 31, 2009.
How do you know if they own your loan?
To check, just follow these links to look it up:
Do not confuse the terminology. ALL loans have closing costs.
The costs can get rolled into the new loan amount, be reduced by a higher rate which provides a rate credit, or a combination of both.
The good news is that as of Monday, HARP 2.0 is really here, including the benefit of no Loan To value limit. So those with LTV's >125% with higher rates can now look to refinance. That is the big news and should truly help many homeowners.
I have many clients whom have been patiently waiting for this and now we can start getting them their approvals next week.
Has anyone filed a HARP 2.0 refi yet? My wife's bank Chase called us and said we qualify. We own an underwater condo right now that is on a 6% interest only loan (400K balance, $300K mkt value)...they said we could swap to a 4.625 fixed 30yr rate...since it's a rental income now we don't qualify for a lower rate. There are about $3K in closing costs they will tack on to the balance. The monthly payment is virtually the same as where we are now so it seems like a no brainer. Anything we need to worry about?
I am doing A LOT of HARP 2.0 loans. Not all borrowers are qualifying but most are (with excellent credit being the key). Although the rate is higher these loans (especially >125% LTV) the product is real and available.
I am glad the article states: “It is important for borrowers to be aware that individual lenders are implementing their own underwriting overlays,”
This is where the frustrations in the comments from that story are coming from (and there are A LOT of them!). As each lender has their own internal guidelines that overlay the HARP guidelines, each one is VERY different (in guidelines and pricing).
Finding a knowledgable broker alleviates a lot of the confusion as they have dozens of wholesale relationships with lenders and can fine tune and focus your scenario towards the best lender to match your loan with the lender's guidelines.
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