On November 15th, HARP 2.0 arrived like an early Christmas present.  Now we have to wait until it’s time to open it. Unfortunately, patience is not one of my gifts, but I’ll do my best.

HARP 2.0 is a refinance program intended to help approximately 7 million homeowners who are currently over 80% loan to value their home or completely underwater due to declining home values.  The main criteria of the program is that your loan must be owned by Fannie Mae or Freddie Mac and you must have closed before June 1, 2009.  You can check to see if your loan is owned by Fannie Mae here or Freddie Mac here. If it is not owned by one of these two entities, you are not eligible for the HARP program.  This also eliminates FHA, USDA, and Jumbo transactions.  You can check to see if your closing date was prior to June 1,2009 by looking at your closing paperwork.

The HARP 2.0 program offers some very lenient guidelines.  

1)  You are allowed to have one 30 day mortgage late over the last 12 months. 

2)  A typical appraisal probably will not be required. Lenders may use an AVM (Automated Valuation Model) to determine your homes value.  The appraised value will not matter.

3)  You can use any mortgage lender for the HARP program.  You do not have to use the same bank that currently holds your mortgage.

4)  If you currently have PMI (Private Mortgage Insurance) you will continue to pay the same monthly premium and continue to have PMI.

5)  The maximum loan amount is $417,000

6)  You can roll in the costs associated with the loan into the new mortgage

7)  Primary residences, Second Homes, and Investment properties all qualify

8)  You cannot consolidate a first and second mortgage into one loan under this program.  If you currently have a 2nd mortgage or HELOC, it will be up to the bank that holds the 2nd to agree to subordinate the junior mortgage.

9)  If you have already taken advantage of HARP, you are not eligible to do so again.

10)  You do not need to have a job to qualify unless your new principal and interest payment increases by more than 20%.  Your income will not be verified.

When the first HARP program was released in 2009, lenders applied their own criteria to the program. For instance, some only allowed the loan to value to be 95%.   The program should be released and ready to go the first week of December.  As lenders attempt to wrap their hands around this new program and determine exactly what the qualifications will be, let’s get ready to take advantage.  If there is a huge gain in refinance volume, it is possible that lenders will raise rates in order to control the flow of new refinances

Freddie Mac

Image via Wikipedia

into their pipelines.  You need to start getting your paperwork together now so when it’s time to act, you’ll be ready.  Send an email to chuck.walden@prospectmtg.com for a complete checklist of items you will need.

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