HARP
Refinance Program: The Complete HARP II Eligibility Requirements
If you currently have a HARP application with me, I will be contacting you soon as the program guidelines are beginning to sort out. This post is for general HARP inquiries and for those borrowers new to the information.
Welcome to my blog. I'm glad you're here. Get notified by email
when I write something new on this blog. Enter your e-mail to the right>>>>
UPDATE: The
government's new HARP 2.0 Refinance Program is available to U.S. homeowners as
of March 17, 2012. This post is accurate and up-to-date. Click here to get a HARP refinance rate
quote.
If you're underwater
on your conforming, conventional mortgage, you may be eligible to refinance without
paying down principal and without having to pay mortgage insurance.
Here are the details
of the government's new 2012 HARP refinance program.
What Is HARP?
HARP was started in
April 2009. It goes by several names. The government calls it HARP, as in Home
Affordable Refinance Program.
The program is also
known as the Making Home Affordable plan, the Obama Refi plan, DU Refi +, and
Relief Refinance.
In order to be
eligible for the HARP refinance program :
1.
Your loan must be
backed by Fannie Mae or Freddie Mac.
2.
Your current mortgage
must have a securitization date prior to June 1, 2009
If you meet these two
criteria, you may be HARP-eligible. If your mortgage is FHA, USDA or a jumbo
mortgage, you are not HARP-eligible.
HARP : Questions and
Answers
Do these
question-and-answers account for the "new" HARP mortgage program?
Yes, everything you
are reading is accurate as of today, April 16, 2012. This post includes the
latest changes as rolled out by the Federal Home Finance Agency on October 24,
2011, and as confirmed by Fannie Mae and Freddie Mac on November 15, 2011. HARP
2.0 was formally released by Fannie Mae and Freddie Mac March 17, 2012.
Is "HARP"
the same thing as the government's "Making Home Affordable" program?
Yes, the names HARP
and Making Home Affordable are interchangeable.
How do I know if
Fannie Mae or Freddie Mac has my mortgage?
Fannie Mae and Freddie
Mac have "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. Your loan must appear on one of these two sites to
be eligible for HARP.
If my mortgage is held
by Fannie Mae or Freddie Mac, am I 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.
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 -- so you don't forget. Give that
information to your lender when you apply for your HARP refinance. Click here for a HARP rate quote.
My mortgage is backed
by Wells Fargo. Am I eligible for HARP?
It's possible that
your mortgage is backed by Wells Fargo, but the more likely answer is that
Wells Fargo is just your mortgage servicer; the bank that collects your
payments. Wells Fargo backs very few of its own loans. Most loans for which
payments are sent to Wells Fargo are backed by either Fannie Mae or Freddie
Mac. Double-check with Fannie Mae and Freddie Mac before assuming Wells Fargo
backs your loan.
My mortgage is backed
by Bank of America. Am I eligible for HARP?
Bank of America does
back some of its own loans, but the more likely answer is that Bank of America
is your mortgage servicer; the bank that collects your monthly mortgage
payments. Bank of America backs very few of its own loans. For most loans for
which payments are sent to Bank of America, Fannie Mae or Freddie Mac are the
actual loan-backers. Double-check with Fannie Mae and Freddie Mac to make sure
Bank of America doesn't hold your loan.
My mortgage is backed
by Chase. Am I eligible for HARP?
There is a chance that
Chase backs your loan, but what's more likely is that Chase is just your
mortgage servicer; the bank that collects your payments each month. Chase backs
very few of its own loans. For most loans for which payments are sent to Chase,
you'll find that Fannie Mae or Freddie Mac are the actual loan-backers.
Double-check with Fannie Mae's and Freddie Mac's websites to make sure your
loan is not held by Chase.
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 not HARP-eligible. However,
you may still be eligible for a "regular" refinance to lower rates. Use this form to get a rate quote to see your options. Or, if your mortgage is
insured by the FHA, use the FHA Streamline Refinance program. The FHA
Streamline Refinance helps underwater homeowners, too.
Does HARP work the
same with Fannie Mae as with Freddie Mac?
Yes, for the most
part, the HARP mortgage program is the same with Fannie Mae as with Freddie
Mac. There are some small differences, but they affect just a tiny, tiny
portion of the general population. For everyone else, the guidelines work the
same.
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.
I've been told by my
bank that I'm not eligible for HARP. I think my bank is wrong. Can I get a
second opinion?
If you've been turned
down for HARP but believe that you're eligible, apply with a different bank and
see what happens. Different banks are using different variations of the HARP
2.0 program. The edits are subtle, but they're enough to cause some people to
get denied who should otherwise have been approved. If you've been turned down
for HARP 2.0, use this form to
get a rate quote from a different bank.
What are the HARP
program's mortgage rates?
Mortgage rates for the
HARP mortgage program are the same as for a "traditional" refinance.
There is no "premium" for using the HARP program.
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 paid on-time for the prior 6 months, and at least 11 of the most recent
12 months. Second, your mortgage must have been sold to Fannie or Freddie prior
to June 1, 2009. And, third, you may not have used the HARP mortgage program
before -- only one HARP refinance per mortgage is allowed.
My mortgage was
securitized shortly after the HARP deadline of May 31, 2009. Can I get a waiver
or exception?
No, there are no
"date exceptions" for HARP. If your loan was not securitized on, or
before, May 31, 2009, you cannot use HARP.
If I refinanced with
HARP a few years ago, can I use it again for HARP II?
No. You can only use
the HARP mortgage program one time per home. If you used HARP 1, you cannot use
HARP 2.0.
I refinanced into a
HARP loan a few years ago, but my bank never told me it was a HARP loan. I feel
like I was lied to. Can I use HARP again under the HARP II program?
No. You can only use
the HARP mortgage program one time per home. If you used HARP 1, you cannot use
HARP 2.0.
Is there a
loan-to-value restriction for HARP?
No. All homes --
regardless of how far underwater they are -- are eligible for the HARP program.
Click here for a HARP rate quote.
I am really far
underwater on my mortgage. Can I use HARP?
Yes, you can use HARP
even if you're really far underwater on your mortgage. There is no
loan-to-value restriction under the HARP mortgage program so long as your new
mortgage is a fixed rate loan with a term of 30 years or fewer. If you use HARP
to refinance into an adjustable-rate mortgage, your loan-to-value is capped at
105%.
Maybe I wasn't clear.
I am really, really far underwater on my mortgage. Are you sure I can
use HARP?
Yes, I am sure. The
new HARP mortgage program specifically has no loan-to-value restriction
so that homeowners in Florida, California, Arizona and Nevada can take
advantage of it. You can have 300% loan-to-value, and still be HARP-eligible.
HARP is now unlimited LTV for fixed rate loans with 30-year terms or less.
If I refinance with
HARP using an ARM, do I still get "unlimited LTV"?
No, if you use an ARM
for HARP 2.0, you are limited to 105% loan-to-value. Only fixed rate loans get
the unlimited LTV treatment.
Will my home require
an appraisal with the HARP mortgage program?
Sort of. Although your
home's value doesn't matter for the HARP mortgage program, lenders will run
what's called an "automated valuation model" (AVM) on your home. If
the value meets reliability standards, no physical appraisal will be required.
However, your lender may choose to commission a physical appraisal anyway --
just to make sure your home is "standing".
Is HARP the same thing
as an FHA Streamline Refinance?
No, the HARP mortgage
program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances
are performed through the FHA. The programs have similarities, however.
I have an FHA
mortgage. Can I use the HARP 2.0 program?
No, you cannot use the
HARP 2.0 program for an FHA loan. If your current mortgage is backed by the
FHA, and your home is underwater, use the FHA Streamline Refinance program. Click
here to read about the FHA Streamline Refinance program.
I have a USDA
mortgage. Can I use the HARP 2.0 program?
No, you cannot use the
HARP 2.0 program for a USDA loan. If your current mortgage is backed by the
USDA, and your home is underwater, use the USDA's Refinance program. Click here to get USDA mortgage rates.
I have a VA mortgage.
Can I use the HARP 2.0 program?
No, you cannot use the
HARP 2.0 program for a VA loan. If your current mortgage is backed by the VA,
and your home is underwater, use the VA's IRRRL program. Click here to get VA mortgage rates.
Does Ginnie Mae
participate in the HARP Refinance program?
No, Ginnie Mae does
not participate in the HARP Refinance program. Ginnie Mae is associated with
FHA mortgages -- not conventional ones. HARP II is for conventional mortgages
only.
Do I have to HARP
refinance with my current mortgage lender?
No, you can do a HARP
refinance with any participating mortgage lender.
So, I can use any mortgage
lender for my HARP Refinance?
Yes. With the Home
Affordable Refinance Program, you can refinance with any participating HARP
lender. Click here for a HARP rate quote.
My current bank says
that they're the only ones who can do my HARP Refinance. Is that true?
No, that's not true.
Or, at least it shouldn't be. There are very few instances in which a
HARP applicant will be precluded from shopping for the best rate. It's doubtful
that your situation is one of them.
My current mortgage is
with [YOUR BANK HERE] and I don't like them. Can I work with another bank?
Yes, with HARP, you
can work with any participating lender in the country. Click here for a HARP rate quote.
I put down 20% when I
bought my home. My home is now underwater. If I refinance with HARP, will I
have to pay mortgage insurance now?
No, you won't need to
pay mortgage insurance. If your current loan doesn't require PMI, your new loan
won't require it, either.
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 an extra
step. Remind your lender that you're paying PMI to help the refinance process
move more smoothly.
My bank says I can't
refinance with HARP 2.0 because I have PMI. Is that true?
No, it's not true. You
can refinance via HARP 2.0 even if your current mortgage has private mortgage
insurance.
Why does my loan
officer tell me I can't refinance with HARP because my current mortgage has
PMI?
The new HARP program
is exactly that -- new. There are new rules and guidelines and not every bank
is up-to-speed on what's going on. If you're hearing that you can't refinance
your current mortgage because it has PMI on it, that's a signal that you're
working with sub-optimal loan officer. You may want to shop around. Click here for a HARP rate quote.
My current mortgage
has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?
Yes, you can refinance
your mortgage via HARP 2.0 if your current loan has lender-paid mortgage
insurance (LPMI). It's your loan officer's responsibility to make sure that
your new mortgage carries, at minimum, the same amount of coverage.
I have no idea what
that means. How do I choose my PMI "coverage" when I refinance a HARP
loan that has LPMI?
Don't worry about it.
Your loan officer will know what to do. Just make sure you disclose that your
mortgage has LPMI so the bank knows what to do. Otherwise, your loan could be
delayed in processing. Click here to get a HARP rate quote.
How do I know if my
mortgage has Lender-Paid Mortgage Insurance (LPMI)?
To find out if your
mortgage has lender-paid mortgage insurance (LPMI), locate your loan paperwork
from closing. There should be a clear disclosure that states that your mortgage
features LPMI, and the terms should be clearly labeled for you.
I don't see an LPMI
disclosure in my closing package but I think that I have it. How do I know if
my mortgage has LPMI?
If there is no LPMI
disclosure, first check if your first mortgage's loan-to-value exceeded 80% at
the time of closing. If it did, look to see if you are paying monthly mortgage
insurance. If you are not paying monthly PMI, you're likely carrying LPMI.
What's the bottom line
with HARP refinances and mortgage insurance?
With HARP, regardless
of whether you have borrower-paid mortgage insurance (BPMI) or lender-paid
mortgage insurance (LPMI), a refinance is possible. The key is that the new
loan has mortgage insurance coverage at least equal to the mortgage insurance
coverage on your current mortgage.
What if my lender
won't give me a HARP refinance because I have mortgage insurance?
If your lender tells
you that you can't have a HARP 2.0 loan because you have mortgage insurance,
find a new lender. There are plenty that of banks that can -- and want to --
help you. Click here for a HARP rate quote.
What's the biggest
mortgage I can get with a HARP refinance?
HARP refinances are
limited to your 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 $625,500.
Can I do a cash-out
refinances with HARP?
No, the HARP mortgage
program doesn't allow cash out refinance. Only rate-and-term refinances are
allowable.
Can I refinance a
second/vacation home with HARP?
Yes, you can refinance
any second/vacation property with HARP, even if the home was once your primary
residence. The loan must meet typical program eligibility standards.
Can I refinance an
investment/rental property with HARP?
Yes, you can refinance
an investment/rental property with HARP, even if the home was once your primary
residence. You can refinance a home on which you're an "accidental
landlord" via HARP. The loan must meet typical program eligibility standards.
I rent out my old
home. Is it HARP-eligible even though it's an investment property now?
Yes, you can use the
HARP Refinance program for your former residence -- even if there's a renter
there now.
How long do I have to
stay in my house if I use HARP on my primary residence?
There is no specific
time frame for which you're required to stay in your home if you use HARP 2.0.
Just like any other mortgage, if you plan to stay in your home post-closing,
it's your primary residence. If you plan to turn it into a rental, it's an
investment property. Click here to see today's HARP mortgage
rates.
These things I'm
reading here... Why, when I call my bank, do they tell me it's not true?
It's possible that the
call center representative to whom you're speaking is neither knowledgeable
about HARP, nor the actual mortgage underwriting process. This post is
researched and cross-referenced against Fannie Mae and Freddie Mac guidelines,
and publicly-available reports from the FHFA.
Are condominiums
eligible for HARP refinancing?
Yes, condominiums can
be financed on the HARP refinance program. Warrantability standards still
apply.
Can I consolidate
mortgages with a HARP refinance?
No, you cannot
consolidate multiple mortgages with the HARP refinance program. It's for first
liens only. All subordinate/junior liens must be resubordinated to the new
first mortgage.
What happens to my
second mortgage when I refinance my first mortgage using HARP 2.0?
HARP 2.0 is meant for
first liens only. Second liens are meant to subordinate. You'll get to replace
your first mortgage and your second mortgage will remain as-is. Just be sure to
mention your second mortgage at the time of application so your lender knows to
order the subordination for you.
My second mortgage
isn't backed by Fannie Mae or Freddie Mac. Is that a problem?
No, it doesn't matter
if your second mortgage isn't backed by Fannie Mae or Freddie Mac. Second
mortgages are ignored as part of HARP. They can't be refinanced, and they can't
be consolidated. Second mortgages are a non-factor in HARP 2.0.
My bank is not setup
for HARP and I want to refinance. What do I do?
If your current bank
is not setup for HARP, find a new lender. HARP is available through any
participating bank (and there are a lot of them). Click here for a HARP rate quote.
Can I "roll
up" my closing costs with a HARP 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 the local conforming loan
limits, however.
I am unemployed and
without income. Am I HARP-eligible?
Yes, you do not need
to be employed to use the HARP mortgage program. HARP applicants do not need to
be "requalified" unless their new principal + interest payment
increases by more than 20%. If the new payment increases by less than 20%, or
falls, there is no requalification necessary.
What is the maximum
income that a HARP applicant is allowed?
The HARP refinance
program has no maximum income limits. You cannot "earn too much" to
qualify. Click here to get a HARP rate quote.
So, I can't earn too
much money to use HARP 2.0?
No, there are no
income restrictions for the Home Affordable Refinance Program (HARP). A
similar-sounding program, though -- Home Affordable Modification Program (HAMP)
does have income limitations. Many people confuse the two.
Is HARP the same thing
as HAMP?
No. HARP stands for
Home Affordable Refinance Program. HAMP stands for Home Affordable Modification
Program. Both programs are supported by the Making Home Affordable initiative,
but that's about where the similarities end.
I am now divorced. I
want to remove my ex-spouse from the mortgage. Can I do that with HARP?
Yes. With HARP, a
borrower on the mortgage can be removed via a HARP refinance so long as that
person is also removed from the deed; and has no ownership interest in the
home. Click here for a HARP rate quote.
Do HARP refinances use
Loan-Level Pricing Adjustments (LLPAs)?
Yes, HARP mortgages
use loan-level pricing adjustments, but LLPAs are dramatically reduced on a
HARP refinance and, in some cases, waived entirely. For example, there are no
LLPAs for fixed-rare HARP refinances with terms of 20 years or fewer. For all
other loans, loan-level pricing adjustments are capped at 0.75 points.
Does a HARP Refinances
require LLPAs for a 15-year fixed rate mortgage?
No, there are no LLPAs
for 15-year fixed rate mortgage via the HARP Refinance program.
Is there a minimum
credit score to use the HARP program?
No, there is no
minimum credit score requirement with the HARP mortgage 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 lender?
No, you can do a HARP
refinance with any participating lender you want. Click here for a HARP rate quote.
My current lender
tells me that if I want to do a HARP refinance, I have to go through him. Is
that true?
No, it's not true that
you can't shop for the lowest HARP refinance rates available. You are allowed
to do a HARP refinance with any HARP-participating lender.
My bank called me for
a HARP refinance. The rate seems high. Should I shop around?
Yes, it's always a
good idea to shop for the best combination of mortgage rates and loan fees.
However, be sure to shop with reputable lenders that have experience
underwriting and approving HARP mortgages. HARP 2.0 is a new refinance program
and not many banks have expertise with them. You don't want to have your loan
approval fall apart because your lender failed to underwrite to HARP mortgage
standards.
Where can I get the
lowest rates on HARP loans?
The HARP program is
just like any other mortgage -- you'll want to shop around for the best rates
and service. However, because HARP is a "specialty loan", you may
want to limit your shopping with reputable lenders that know how to
specifically handle HARP loans.
What are the costs to
refinance via the HARP program?
Closing costs for HARP
refinances should be no different than for any other mortgage. You may pay
points, you may pay closing costs, you may pay neither. How your mortgage rate
and loan fees are structured is between you and your loan officer. You can even
opt for a zero-cost HARP refinance. Ask your loan officer about it.
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
mortgage 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.
What does the term
"Relief Refinance" mean?
"Relief
Refinance" is the Freddie Mac equivalent of DU Refi+.
For how long should I
lock my mortgage rate via the HARP Program
Lock for 45 days, at
minimum. This is because the HARP mortgage 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.
When does the HARP
program end?
If you are
HARP-eligible, you must close on your mortgage prior to January 1, 2014 --days
from now.
How do I apply for the
HARP program?
Use this form to get a rate quote. If the rate looks good, you can accept it.
There is no fee for applying.
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.
Until next time...
No comments:
Post a Comment