HARP Refinance – The first few months
HARP 2.0 has been in place for awhile now, and although I have helped several people refinance their underwater loans with the HARP 2.0 loan program, it has actually been a bit disappointing. As typical with government programs, the reality of HARP 2.0 falls short of the perception.
When the program was announced back in October, 2011 it sounded like everyone – no matter what their loan to value or their income would be able to refinance at today’s low interest rates.
When the program moved full steam ahead in March, 2012, many people have been left on the sidelines wondering why they can not qualify, or why they have been denied. Many people with loan-to-values over 105% or with private mortgage insurance are finding their options even more limited.
Here is what I have learned about HARP 2.0 so far…
- Freddie Mac. For a while it was almost impossible to get an “Approval” through Freddie Mac’s automated underwriting engine. They supposedly have tweaked their system, so if you have a Freddie Mac loan that was denied just weeks ago. Try again.
- Unlimited Loan To Value Guidelines – When the guidelines of HARP 2.0 were release last year, they announced that loan to value restrictions were being removed. Although this was the guidelines of the program, most of the large lenders are limiting the loan to value.
- Appraisal Waivers – The appraisal waivers come from Fannie Mae and Freddie Mac. Each have their own automated valuation systems that determine their estimated value of a property. If the automated system accepts your estimated value of the property, then no appraisal is needed. Keep in mind that not every HARP 2.0 refinance will qualify to have the appraisal waived, and that we are seeing very loan “automated” values.
To read more about the reality of HARP 2.0