(Source: Bank of West, Fannie Mae, Freddie Mac) — Bank of the West has seen a rise in mortgage loan applications since April as homeowners seek to take advantage of low interest rates under the government’s Home Affordable Refinance Program (HARP) 2.0.
Bank of the West’s Mortgage Banking Division projects 20% of its mortgage originations in the remainder of 2012 will be HARP refinance loans.
For consumers wanting to learn more about HARP, Bank of the West has published Eight Essential Harp Tips and introduced an educational video series on HARP loans that can be viewed on YouTube at YouTube.com/Bankofthewest.
“We are anticipating that one out of every five new borrowers will be a homeowner seeking a HARP 2.0 refinance loan this year,” said Karen Mayfield, Bank of the West’s National Sales Manager for the Mortgage Banking Division. “This program is providing real relief for homeowners who are current on their mortgage but have been unable to refinance due to a decline in the value of their home.”
HARP 2.0 is a federal mortgage refinance program aimed at helping homeowners who are current on their mortgage payments but have been unable to refinance due to the decline in home values in recent years.
Mayfield said low 30-year fixed rates are contributing to the wave of refi applications. The average U.S. rate on the 30-year fixed mortgage has been below 4% for most of 2012, according to data from Freddie Mac.
Bank of the West’s Eight Essential HARP Tips are:
Eligibility. There are four criteria to be eligible.
Your mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac
Your mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009
Your home’s Loan-to-Value (LTV) must be greater than 80%
You must be current with your mortgage payments now and have had no 60-day mortgage late payments in the past 12 months
Fannie Mae and Freddie Mac Connections. You can call Fannie Mae at 800-7Fannie or Freddie Mac at 800-FREDDIE. Or go to their loan look-up websites: www.freddiemac.com/mymortgage or www.fanniemae.com/loanlookup.
HARP 2.0 vs. HARP 1.0. The new program has several improvements. HARP 2.0 eliminates the need for a new property appraisal if Fannie or Freddie has provided a reliable automated valuation model (AVM) estimate; it eliminates certain fees for borrowers refinancing into shorter-term mortgages and reduces fees for other borrowers; and it removes the 125% loan-to-value ceiling on fixed-rate mortgages backed by Freddie and Fannie.
Homeowner benefits. There are three primary benefits for homeowners participating in HARP 2.0.
HARP makes it possible for people with low or no equity in their homes to refinance and take advantage of lower rates – potentially lowering the monthly payment.
Refinancing to a fixed-rate HARP loan from an adjustable rate mortgage could help you stabilize your payments as interest rates fluctuate.
By lowering your interest rate or refinancing from an interest-only mortgage to a fixed-rate HARP loan, you could save money and stabilize your payments for the long-term.
No principal reduction. HARP will help homeowners get into lower-cost mortgages with greater-stability, but HARP loans will not reduce the principal.
Shop around. Many lenders are participating in HARP 2.0. As with all financial decisions, you should look around for the most competitive rates and the loan that is best for your personal situation.
Beware. Too often homeowners seeking help with their mortgage are targets of scammers. Protect yourself:
Beware of anyone who asks you to pay a fee in exchange for counseling services or to modify a delinquent loan.
Beware of people who pressure you to sign papers immediately or who try to convince you that they can “save” your home if you sign or transfer over the deed to your house.
Do not sign over the deed to your property to any organization or individual unless you are working directly with your mortgage company to forgive your debt.
If you don’t qualify. If you don’t qualify for a HARP refinance loan, there may be an alternative program to help you. Talk to your lender, or visit the federal government’s website www.Makinghomeaffordable.gov.
About Bank of the West
Founded in 1874, $62.4 billion-asset Bank of the West (www.bankofthewest.com), Member FDIC and Equal Housing Lender, offers a full range of personal, commercial, wealth management and international banking services. The bank operates more than 700 retail and commercial banking locations in 19 Western and Midwestern states. Bank of the West is a subsidiary of BNP Paribas, which has a presence in 80 countries with nearly 200,000 employees.
Bank of the West Corporate Communications
Source: Bank of West, Fannie Mae, Freddie Mac