HARP 2.0 Loan Frequently Asked Questions

HARP 2.0 Frequently Asked Questions

Here are some HARP 2.0 Frequently Asked Questions – If yours is not on the list here, Contact us.

What is the difference between HARP and HARP 2.0?

Both HARP and HARP 2.0 fall under the Making Home Affordable Program. Essentially HARP 2.0 is an expansion of the original HARP program that was launched in 2009. In April of 2012, the Federal Housing Finance Agency, with Fannie Mae and Freddie Mac (the Enterprises), announced a series of changes to the Home Affordable Refinance Program (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their home mortgage. In a nutshell, Harp 2.0 is an industry-wide effort to find ways to increase the number of homeowners who are able to refinance through HARP. Homeowners will be able to take advantage of increased underwriting leniency and take advantage of lowered adjustment caps resulting in lower interest rates.

What is difference between HAMP and HARP?

Congress came out with 2 parts of the housing stimulus. One was called HAMP (Home Affordable Modification Program) which is for people who are behind on their payments and facing foreclosure. The other program is called HARP (Home Affordable Refinance Program), and is for people who are current on their mortgages. You will want to inquire with a HARP specialist who can quickly determine which program is best for you.

May borrowers obtain a HARP loan through their through their existing servicer or do they have the option to use another lender?

HARP loans have refinancing options for each scenario depending on the borrower’s situation and preference. HARP loans may be originated by any Fannie Mae or Freddie Mac approved lender selected by the borrower. Many servicers have restrictive overlays that may disqualify you from a HARP loan from them. Look for a lender with minimal overlays and maximum options.  This will allow those with lower credit, investment properties, and/or hight debt to income ratios (DTIs) to still qualify.  Call 855-200-HARP (4277)

My current servicer/lender cannot help me. Does that mean I do not qualify for HARP?

Not at all. Your current servicer may have overlays that prohibit them from helping you. Look for a HARP lender with minimal overlays, thus maximizing your options.

What is “HARP 2.0” all about?

HARP is a critical part of the Obama Administration’s broad strategy to help homeowners avoid foreclosure, stabilize the country’s housing market, and improve the nation’s economy. Eligible homeowners can lower their monthly mortgage payments and get into more stable loans at today’s low rates. Additionally, in an effort to be responsive to the needs of today’s homeowners, there are also options for homeowners who owe more than their homes are worth by providing options with more lenient underwriting.

I’m current on my mortgage. Will a refinance under the Home Affordable Refinance Program (HARP) help me?

Eligible homeowners who are current on their mortgages but have been unable to take advantage of lower interest rates because their homes have decreased in value, may have the opportunity to refinance. Through a refinance under HARP, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they guaranteed in mortgage backed securities. To see if your mortgage is eligible for a refinance please visit:

http://www.makinghomeaffordable.gov/get-assistance/loan-look-up/Pages/default.aspx

I have a Fannie Mae or Freddie Mac loan. Can I still refinance my home, even if I owe more than what the property is worth?

Yes. A HARP Streamline allows you take advantage of current market rates even if you are “underwater” and owe more than your home is currently worth. That’s one of the greatest benefits of the HARP 2.0.

I have an FHA or VA loan. Can I still refinance my home, even if I owe more than what the property is worth?

Yes. A Ginnie Mae Streamline allows you take advantage of current market rates even if you are “underwater”.

How do I know if my loan is owned or has been guaranteed by Fannie Mae or Freddie Mac?

Ask your mortgage lender or servicer. Also, both Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Homeowners can enter information to determine if either agency owns or guaranteed the loan. This information is not a guarantee of eligibility for a refinance under HARP, as other qualifying criteria must also be met.

For Fannie Mae:
1-800-7FANNIE (8am to 8pm EST)

http://www.fanniemae.com/loanlookup

For Freddie Mac:
1-800-FREDDIE (8am to 8pm EST)

http://www.freddiemac.com/mymortgage

Will refinancing lower my payments? How might HARP benefit me?

The objective of a refinance under HARP is to provide creditworthy homeowners who have shown a commitment to paying their mortgage the opportunity to get into a new mortgage with better terms.

Homeowners whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Homeowners who are paying interest only, who have a low introductory rate that will increase in the future, or who face a balloon payment may not see their current payment go down if they refinance to a fixed rate and payment. These homeowners, however, could save a great deal of money by reducing the amount of interest you pay over the life of the loan.

Refinancing into a more stable fixed-rate loan product and avoiding future mortgage payment increases would likely improve your ability to sustain your mortgage payments over the long-term. When you submit a loan application, your lender will give you a “Good Faith Estimate” and a “Truth in Lending Statement” that includes your new interest rate, mortgage payment, and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

Will a refinance under HARP reduce the amount that I owe on my loan?

No. The objective of a refinance under HARP is to help homeowners get into more stable or more affordable loans. Refinancing will not reduce the principal amount you owe to the first lien mortgage holder or any other debt you owe.

I have both a first lien & a second lien mortgage. Do I still qualify for a refinance under HARP 2.0?

Yes. Your eligibility will depend, in part, on two additional requirements:
•The lender that has your junior lien mortgage must agree to remain in a junior lien position.
•You must be able to demonstrate your ability to meet the new payment terms on the first lien mortgage.

What are the interest rates and other terms of a refinance under HARP 2.0?

The rate will be based on market rates in effect at the time of the refinance and the homeowner will be subject to any associated points and fees quoted by your lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans must have no prepayment penalties or balloon payments. With HARP 2.0 the Enterprises, Fannie Mae and Freddie Mac, have created adjustment caps. These adjustment caps, if implemented by the lender, will in turn allow for lower interest rates and/or closing costs.

Can I get cash out of a HARP refinance to pay other debts?

No. The Home Affordable Refinance will not return cash to the borrower for the purpose of paying other debts. However, you may be able to increase your short term cash flow by skipping 1 or 2 months payments, and receive your escrow refund if you currently escrow.

I am delinquent on my mortgage. Will I qualify for a refinance under HARP 2.0?

No. Homeowners who are currently delinquent or have been more than 30 days overdue during the past 12 months generally will not qualify. Contact your servicer to see if a modification under the Home Affordable Modification Program is an option for you.

What is DU Refi Plus?

DU Refi Plus is Fannie Mae’s automated underwriting engine for HARP. A HARP loan specialist will be able to run the DU Refi Plus (Direct Underwriting Refi Plus) automated underwriting engine to get your direct approval in hand.

What is Relief Open Access?

Relief Open Access is Freddie Mac’s automated underwriting engine for HARP. A HARP loan specialist will be able to run the Relief Open Access automated underwriting engine to get your approval in hand.

Will I need an appraisal with my HARP loan?

In most cases you will NOT need an appraisal. If the Fannie Mae or Freddie Mac automated underwriting engine is able to determine a reasonable value for your property, whether you are underwater or not, then in most cases you will not need an appraisal. An experienced HARP loan specialist will be able to maximize the possibility of getting an appraisal waiver.

Will I need private mortgage insurance (PMI) on a HARP 2.0 refinance loan?

If your existing loan has private mortgage insurance, you will need the same amount of insurance coverage for a refinance under HARP. If your existing loan does not have private mortgage insurance, it will not be required as part of a refinance under HARP reguardless of your Loan to Value (LTV). In some cases, private mortgage insurance can be removed altogether.

Is there a limit of how much my property can be underwater or upside down?

No. You can be an unlimited amount underwater and still be eligible for HARP. You will want to look for a lender with minimal overlays, thus maximizing your eligibility.

My current servicer/lender is Green Tree and they cannot help me. Does that mean I do not qualify for HARP 2.0?

No, Not at all. Green Tree may have overlays that prohibit them from helping you. Look for a HARP lender with minimal overlays, thus maximizing your options. We will be happy to spend some time with you to discover all your options. Our HARP Analyzer will generate a great report for you to see the benefits of HARP 2.0.

What is HARP 3.0?

HARP 3.0 may allow homeowners to take advantage of lower interest rates, even when their current mortgage is not owned by Fannie Mae, Freddie Mac or Ginnie Mae. It is currently being discussed in Congress. We will have all the details as they become released. HARP 3.0 may also allow those that refinanced with a HARP Program before to do it all again at a lower rate.

I tried a modification but was not approved. Am I eligible for HARP 2.0?

Yes. If you can document a 12 month clean payment history on your mortgage, you may still be eligible for HARP 2.0.

HARP Questions

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