Posts Tagged ‘Fannie Mae’

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A month or so ago, I discussed the upcoming release of HARP 2.0.  HARP 1.0 is a mortgage program which allows homeowners to refinance up to 125% of their home’s value.  Of course, some lenders do put their own restrictions on the Loan to Value (LTV).  HARP 2.0 is “supposed” to remove the LTV cap for underwater homeowners and provide them with the much needed benefit of a refinance at a lower rate.

Even though this program was released last year, the official launch should be in mid March 2012.  Fannie Mae and Freddie Mac have been updating their systems in order to accomplish the approvals of this new program.

Call to action:  DO NOT wait until mid March to start thinking about doing this.  Go ahead and get your loan officer on the phone and get the process started now.  I’m sure you can imagine the massive influx of new refinance applications that will pour in once this has been released.  Your loan officer will give you a list of items needed in order to process and underwrite your new loan.  Make sure you’re at the top of the stack not the bottom.

To apply immediately, you can call me at 678-725-8076 or go to my website www.ChuckWalden.com and apply there.

About the Author:  Chuck Walden (NMLS #148160) is a loan officer with Prospect Mortgage.  Email Chuck at chuck.walden@prospectmtg.com or call 678-725-8076.  Bonus: Click to get a free, no obligation preapproval. I love to work with my readers!

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As you might have heard, or read about, the Guaranty Fee for all Government Sponsored Entities (Fannie Mae and Freddie Mac for example) was increased in order to pay for the extension of unemployment benefits. This will affect all loans delivered to Fannie and Freddie beginning April 1, 2012.

While April 1st may seem far away, most loans that are closed after March 1st will be “pooled” and sold after April 1.  This increase can mean a rate increase by .125 – .250.  All lenders will be adding this increase to their rates. Some all at once and some a little at a time in order to protect themselves for any loans being pooled beginning 2nd quarter.

FHA loans will also be effected by this increase.  You should expect changes in the Upfront Mortgage Insurance Premium or Monthly Premium (or both).  As of today, HUD has not indicated when or how they will handle their side of the equation.

What does this mean for the buyer?  Get busy.  This small increase on a $150,000 loan can mean approx $9000 more over the life of the loan.  What if a customer barely qualifies

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and now we know for certain rates will increase.  Their preapproval may be null and void.  What does this mean to the agent?  Let your buyers know.  They need to make informed choices.  Spread the word and let’s make it happen.

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

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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.