Tip:
Highlight text to annotate it
X
Hi, I’m Ethan Ewing President of Bills.com. We get a huge number of questions and comments
on the HARP 2.0 program, and we want to update on some of the recent changes. Our goal is
to answer some of these questions and help you determine your HARP eligibility. You are
only eligible for a HARP refinance if, One, your current mortgage is owned or guaranteed
by Freddie Mac or Fannie Mae and you got it before June first, 2009.
Two, you haven't already refinanced under HARP in the past few years.
Three, your current loan-to-value (LTV) is greater than 80%.
Fourth, You are current on your mortgage at the time of the refinance, with no late payment
in the past six months and no more than one late payment of 30 days or less in the past
12 months. A few updates, firsts of all, as of March
19th 2012, HARP 2.0 is in full swing. Fannie and Freddies’ underwriting systems are now
up and running. That means you can get a HARP loan with any HARP lender. You are no longer
restricted to working with your current lender or service provider.
Secondly, many lenders are applying their own restrictions for new HARP loans, beyond
what Fannie or Freddie require. Specifically, lenders have their own LTV and credit score
requirements. Some lenders are not going beyond the HARP 1.0 LTV limit of 125%, and that’s
made these loans riskier for lenders. Third, you may still need an appraisal, although
there has been more automated underwriting now allowed within these programs. The number
of appraisals expected to drop by 80%. Fourth, your Debt-to-Income ratio is going
to be scrutinized by lenders. They really want to make sure that you can make these
payments on time and their most effective way to do this is to evaluate what you make
versus what you spend. This is going to be a challenge to self-employed borrowers. If
you do get turned down by one or two lenders. Make sure to keep shopping lenders will have
different Debt To Income Ratios. Fifth, the expectation the reduction in loan
fees that Fannie and Freddie are charging would be passed on to you in the form of savings
is not really happening. Those fees are still pretty high and they really are pretty consistent
with what you’ll get for a standard refinancing. The key point here is just make sure to shop
your loan with multiple lenders. Fees and interest rate will vary by lender.
Bottom line here is that HARP 2.0 guidelines are very technical. Lenders are certainly
applying their own filters and restrictions. If you get rejected try to understand why
make sure you know that. Bills.com can also help you find HARP quotes
and HARP lenders. You can also find tools and other resources on the site to be able
to confirm your HARP eligibility and then find great HARP lenders.
Thanks for watching us here at bills.com, where we are helping people save money every
day!