Making Home Affordable Refinance Program

making home affordable explained Making Home Affordable Refinance Program

What is the Making Home Affordable Refinance Program?

What is the Making Home Affordable Refinance Program? The Making Home Affordable Refinance Program (HARP 2.0) is available to home owners whose: mortgages are upside down; are backed by Fannie Mae and Freddie Mac; and who are current on their payments. If you are making your payments on time but didn’t have enough equity to refinance, you will be able to lower your rate without paying down your mortgage balance or take out mortgage insurance through the Making Home Affordable Refinance Program. ***NEW – Borrowers with lender or borrower paid PMI (Primary Mortgage Insurance) are now okay for the Making Home Affordable Refinance Program!

Program many not be available in all states (case by case). Programs and guidelines subject to change without notice.

Find program guidelines for your your city or state:

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Q & A: Making Home Affordable Refinance Program

How is the new 2012 Making Home Affordable Refinance Program expanded?

Home owners will soon be able to refinance no matter how far under value they are with the FHA Making Home Affordable Refinance Program. This should have a big impact in certain parts of Nevada, Arizona, and Florida where many home owners owe more than 125% of the value of their residential property.

Will I be able to refinance through the Making Home Affordable Refinance Program if I’ve already used the program once?

No. The Making Home Affordable Refinance Program will continue to be limited to loans that were delivered to Fannie Mae and Freddie Mac before June 2009, which means that anyone who has already refinanced under the previous Making Home Affordable Refinance Program won’t be able to refinance again.

What other changes are being made to improve the 2011 Making Home Affordable Refinance Program?

Under the new Making Home Affordable Refinance Program banks will be largely shielded from the “buy back” risk on HARP mortgages, and they’ll only have to verify that home owners meet a more tailored set of eligibility rules: that they’ve made their last six payments and have no more than one missed payment in the last year and that they have a job or another source of regular income.

How will the Making Home Affordable Refinance Program changes help home owners?

Making Home Affordable Refinance Program process will help eliminate the need in many cases for home owners to obtain appraisals or to provide extensive income documentation. Instead, home owners will have to show that they’re current on their mortgage, that they have a job or another source of regular income, and that they meet the other eligibility criteria for the Making Home Affordable Refinance Program. This is not a no doc or stated income loan.

What if I have mortgage insurance?

Mortgage insurers have as well as agreed to make it much easier to transfer existing mortgage insurance coverage for a Making Home Affordable Refinance Program, which has blocked many home owners from the 2011 Making Home Affordable Refinance Program.

What if I have a second mortgage?

Home owners with a second mortgage, such as a home-equity loan, need the mortgage owner to agree to “re-subordinate” the loan before they can get the Making Home Affordable Refinance Program first mortgage. Federal officials say the largest lenders have agreed to automatically re-subordinate all second mortgages under the HARP Refinance.

What else is being done to lower Making Home Affordable Refinance Program costs?

Another new 2012 Making Home Affordable Refinance Program change involves fees that Fannie Mae and Freddie Mac charge banks for riskier home owners. The firms, and their regulator, the Federal Housing Finance Agency, have agreed to waive those fees for home owners who do the Making Home Affordable Refinance Program loan with a shorter term, such as a 15-year mortgage. They’ll as well as reduce the Making Home Affordable Refinance Program fees, but not eliminate them entirely, for everyone else.

When will these changes take effect?

Fannie Mae and Freddie Mac will issue final Making Home Affordable Refinance Program pricing information and other technical HARP Refinance details around Nov. 15, and some banks have said that they could begin taking Making Home Affordable Refinance Program applications under the new program by as soon as Dec. 1. The Making Home Affordable Refinance Program will as well as be extended through 2013, beyond its current HARP Refinance expiration date of June 2012, in order to encourage lenders to invest more resources into staffing up the Making Home Affordable Refinance Program.

What if Fannie Mae or Freddie Mac don’t own my loan—can I refinance through this program?

No. That’s a major limitation, of course, because “jumbo” mortgages aren’t held by Fannie Mae and Freddie Mac, and many of the most under value subprime mortgages are in privately held mortgage securities that weren’t issued by Fannie Mae and Freddie Mac.

Do these question-and-answers account for the “new” Making Home Affordable Refinance Program?

Yes…absolutely, everything you are reading is accurate as of today, December 16, 2011. 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.

Is “HARP” the same thing as the government’s “Making Home Affordable Refinance Program” program?

Yes…absolutely, the names HARP and Making Home Affordable Refinance Program are interchangeable. Making Home Affordable Refinance Program…

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 for the new 2012 Making Home Affordable Refinance Program. Having your mortgage held by Fannie Mae or Freddie Mac is just a pre-qualifier.

My mortgage is held by Fannie or 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 Making Home Affordable Refinance Program.

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 ineligible for the Making Home Affordable Refinance Program. However, you may still be eligible for a “regular” refinance to lower rates. Use our online form to get a rate quote to see your options. Or, if your mortgage is insured by the FHA, use the same form or contact us. Like the new 2012 Making Home Affordable Refinance Program the FHA Streamline Refinance helps under value homeowners, too.

Does HARP work the same with Fannie Mae as with Freddie Mac?

Yes…absolutely, for the most part, the Making Home Affordable Refinance 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 get a HARP Refinance.

Will a HARP Refinance help me avoid foreclosure?

No. The new 2012 Making 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 for a HARP Refinance?

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 Mae or Freddie Mac prior to June 1, 2009. And, third, you may not have used the Making Home Affordable Refinance Program before — only one HARP refinance per mortgage is allowed.

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.

Is there a loan-to-value restriction for HARP?

No. All residential property — regardless of how far under value they are — are eligible for the HARP program.

I am really far under value on my mortgage. Can I use HARP?

Yes…absolutely, you can. 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.

Maybe I wasn’t clear. I am really, very far under value on my mortgage. Are you sure I can use HARP?

Yes…absolutely, 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 300% loan-to-value, and still be Making Home Affordable Refinance Program eligible. The Making Home Affordable Refinance Program is now unlimited LTV (LOAN TO VALUE) for fixed rate loans with 30-year terms or less.

If I refinance with HARP using an ARM, do I still get “unlimited LTV (LOAN TO VALUSE)”?

Unfortunately no, if you use an ARM for the Making Home Affordable Refinance Program, you are limited to 105% loan-to-value. Only fixed rate loans get the unlimited LTV (LOAN TO VALUE) treatment.

Will my home require an appraisal with the HARP mortgage program?

Sort of. Although your home’s value doesn’t matter for the new 2012 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?

Unfortunately no, the Making Home Affordable Refinance Program is administered through Fannie Mae and Freddie Mac. FHA Streamline Refinances are performed through the FHA. The programs have similarities, however.

Does Ginnie Mae participate in the Making Home Affordable Refinance Program?

Unfortunately no, Ginnie Mae does not participate in the Making Home Affordable Refinance Program. Ginnie Mae is associated with FHA mortgages — not conventional ones. Making Home Affordable Refinance Program II is for conventional mortgages only.

Do I have get the Making Home Affordable Refinance Program with my current mortgage lender?

Unfortunately no, you can do the Making Home Affordable Refinance Program 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 the new 2012 Making Home Affordable Refinance Program lender.

My current bank says that they’re the only ones who can do my HARP Refinance. Is that true?

Unfortunately 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 (Any Bank) and I don’t like them. Can I work with another bank?

Yes…absolutely, with HARP, you can work with any participating lender in the country.

I put down 10% when I bought my home. My home is now under value. If I refinance with HARP, will I have to pay mortgage insurance now?

Unfortunately 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?

Unfortunately 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 current mortgage has Lender-Paid Mortgage Insurance (LPMI). Can I refinance via HARP?

No. If your mortgage has lender-paid mortgage insurance (LPMI), you are HARP-ineligible.

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 (LTV) 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 (and are HARP-ineligible).

What’s the biggest mortgage I can get with a HARP refinance?

The Making Home Affordable Refinance Program is 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 (even some to $729,000!!).

Can I do a cash-out refinance with HARP?

Unfortunately 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…absolutely, you can refinance a 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…absolutely, 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…absolutely, you can use the Making Home Affordable Refinance Program for your former residence — even if there’s a renter there now.

The facts I’m reading here… Why, when I call my bank, do they tell me it’s not true?

We are one of the few experts on HARP. 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…absolutely, condominiums can be financed on the Making Home Affordable Refinance Program. Warrantability standards still apply.

Can I consolidate mortgages with a HARP refinance?

Unfortunately no, you cannot consolidate multiple mortgages with the Making Home Affordable Refinance Program. It’s for first liens only. All subordinate/junior liens must be re-subordinated to the new first mortgage.

Can I “roll up” my closing costs with the new 2012 HARP refinance?

Yes…absolutely, 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…absolutely, you do not need to be employed to use the new 2012 HARP mortgage program. HARP applicants do not need to be “re-qualified” 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 re-qualification necessary.

My original mortgage was a stated income loan. Will my income be verified with a Making Home Affordable Refinance Program?

Unfortunately no, your income will not be verified via the Making Home Affordable Refinance Program unless your new principal + interest payment increases by more than 20 percent. If your new principal + interest payment increases by less than 20%, or falls, there is no income verification necessary.

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 as well as removed from the deed; and has no ownership interest in the home.

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.

Do HARP refinances use Loan-Level Pricing Adjustments (LLPAs)?

Yes…absolutely, 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 the Making Home Affordable Refinance Program require LLPAs for a 15-year fixed rate mortgage?

Unfortunately no, there are no LLPAs for 15-year fixed rate mortgage via the Making Home Affordable Refinance Program.

Is there a minimum credit score to use the Making Home Affordable Refinance Program?

Unfortunately 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?

In most cases, no. You can do a Making Home Affordable Refinance Program with any lender you want.

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 Making Home Affordable Refinance Program

Lock for 45 days, at minimum. This is because the new 2012 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 Making Home Affordable Refinance 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 Making Home Affordable Refinance Program?

If the rate looks good, you can accept it. There is no fee for applying.

If you want to know more about the new 2012 Making Home Affordable Refinance Program please contact us.

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