HARP Most Commonly Asked Questions - Answered!

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
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Hey frustratedincali,
The HARP program is a great program if you qualify for it and rarely do I find people nowadays that do.

The one thing the program doesn't allow for is a combination of the 1st and second or cash out refinances which is typically what this would be called unless the home was purchased with the 2nd (and it sounds like this is your case). The only thing they would allow for is for you to add the closing costs to the balance and get no more than 2,000.00 cash back at closing.

Has the loan charged off on your credit? If that's the case you may be able to refinance conventional 4 years post charge off. If the lien is affecting title, that's where the issue comes along.
 
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frustratedincali

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Jan 24, 2015
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Hey frustratedincali,
The HARP program is a great program if you qualify for it and rarely do I find people nowadays that do.

The one thing the program doesn't allow for is a combination of the 1st and second or cash out refinances which is typically what this would be called unless the home was purchased with the 2nd (and it sounds like this is your case). The only thing they would allow for is for you to add the closing costs to the balance and get no more than 2,000.00 cash back at closing.

Has the loan charged off on your credit? If that's the case you may be able to refinance conventional 4 years post charge off. If the lien is affecting title, that's where the issue comes along.
Thanks for your reply Eric. I'm not sure if it has been charged off. I'm actually going to run my credit report later to see if I can determine this.
 
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Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,100
181
63
San Diego, California
www.loansreduced.com
Sounds like a plan, did you pull it and see if anything had happened? I know it's been awhile since our last post...
 

frustratedincali

LoanSafe Member
Jan 24, 2015
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Sounds like a plan, did you pull it and see if anything had happened? I know it's been awhile since our last post...
Hi Erik, yes I did run my credit report. It's interesting it just shows that I stopped paying on the original mortgage loan and that it was 90 days late. It then states that the loan was sold, but there is no information on the current loan in default which was sold to Specialized Loan Services. So it appears it has not been charged off. It almost looks like the loan disappeared which is strange. I'm not sure what to think of that.
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,100
181
63
San Diego, California
www.loansreduced.com
Interesting, I wonder if the credit reporting agencies just haven't updated your report yet...I've never seen or heard of things just vanishing on the credit report but in this day and age I guess anything is possible.
 

Gee

LoanSafe Member
Jan 21, 2015
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Erick, I was wondering a few things:

1. is HARP still available?
2. status of HARP 3.0
3. my original loan in 2005 was under Fannie Mae, since then it got sold 2 separate times to investors and is not currently under Fannie Mae. Being that the original loan was created a very questionable mortgage time (undocumented loans, 80/20's, approval for higher loans than homeowners could pay etc), am I eligible for programs etc? Should I refer this to an attorney? My loan is currently w Wells and I was advised that only my current loan situation is a factor. I have almost $65k in back payments, owe more on the home than it is worth, got scammed by a third party (who got me approved for HAMP) but advised not to pay as she "appeals" a lower rate which in turn the bank said the mod is off the table because I never signed the final paperwork, I resubmitted on my own and was denied due to ability to pay (my financial situation changed from when I originally stop paying) and now can't resubmit unless I get approved by the reentry team (but something had to change in my financial situation from the last mod submission in June until now). Now everything looks good on paper financially but I still have the 65k and 6.5 interest

Might be more info than what you need but wanted to give you a clearer picture of my situation.

Thank you

HARP Most Commonly Asked Questions – Answered!
As you may know, I am one of the few HARP experts in the industry today and one of the main reasons I’m on this forum is to help educate homeowners of the options they have. I am a licensed California loan officer offering the program with unlimited LTV, loans with Mortgage Insurance and most of the time providing property inspection waivers (appraisal waivers).

What I’ve experienced recently as far as statistics:

Freddie Mac HARP through Loan Prospector (Open Access)

15 – 20% of clients get denied through Loan Prospector for various reasons. My statistics may be lower than normal as I know a few tricks to get past the Caution feedback.
95% of Freddie Mac clients receive appraisal waivers

Fannie Mae HARP through Desktop Underwriting

10 – 15% of clients get denied through Desktop Underwriter
75% of Fannie Mae clients receive appraisal waivers as long as the value submitted is realistic compared to the comparable sales in the area.

Questions & Answers

Do I have to go through my current lender/servicer?


Absolutely not! This is one of the biggest misconceptions with the program, many of the current servicers (ie: Bank of America, Citi, Wells Fargo) are all telling their clients that they must go through them for HARP. This is another tactic used by them to make the borrower believe they have no other options and gouge them with interest rates. Many banks have been quoting rates for HARP that are above market rates. The HARP program is NOT a loan modification, nor is it a negotiation with your lender.
Does this loan include closing costs?

Yes, a HARP transaction is similar to a conventional refinance which will include origination, underwriting, processing, title, escrow, pre-paid taxes, insurance and per-diem interest. Different lenders will offer different rates and closing costs, make sure you work with the company that you feel most comfortable with and who can benefit you most.

Do I need an Appraisal?

In most cases NO, I’ve seen about 10-15% of my current clients needing an appraisal. The system has an automated valuation model built into the program which will determine the value of the home based on comparable sales and if the system is confident that you have submitted an accurate value it will not require an appraisal.
I had a property go into short sale, when can I get HARP?

There is a 4 year seasoning requirement for short sales, your credit must have been repaired in that time as well as no mortgage late payments in the past 12 months.
One of my properties was foreclosed on, when can I get finance

Seven years must have passed from the completion date of the foreclosure. If the foreclosure was a deed-in-lieu of foreclosure the minimum time period is 2 years to re-establish credit under extenuating circumstances but in most cases 4 years.
I’ve filed bankruptcy, how soon am I able to get refinanced under HARP?

Four years must have passed and credit must have been re-established from the discharge date or a 4 year period from the dismissal date. Under extenuating circumstances you may be able to get approved after 2 years, no exceptions under 2 years.
I’ve received a loan modification in the past, am I eligible?

If you’ve received a loan modification on the property you’re trying to refinance under HARP you are NEVER eligible for the program under open access. This may be different with the same servicer guidelines. I have confirmed this through underwriting. They treat a loan modification similar to a short payoff or restructured debt (settled second mortgage, reduction in principal…etc)
Is there a pre-payment penalty on the loan?

No, you can pay the loan off in 5 years, there is no pre-payment penalty on these loans.
Does HARP include a Principal Reduction?

No, A Principal reduction is only able to be obtained through a loan modification.

Can I consolidate both my 1st and 2nd mortgage?

N
o, consolidation of a 1sT and 2ND would be considered a cash out refinance and this transaction is not eligible for underwater borrowers under HARP. The 2nd mortgage will have to be subordinated (agree to stay second position.) To this day, I have not yet had one company give me a hard time with the subordination. If they don’t agree to stay second position they are adding additional risk of foreclosure on the property.
Can I pull cash out to make upgrades?

NO, Cash out transactions are NOT allowed, the max cash back is $250.00
Why is Fannie Mae/Freddie Mac telling me I can’t refinance because of “Credit Enhancements”?

This is a very hot topic and includes loans with Lender Paid Mortgage Insurance. Existing loans that are subject to recourse and/or indemnifications agreements, and the coverage was necessary to meet Fannie Mae minimum credit enhancement requirements applicable to loans with LTVs in excess of 80% remain ineligible for Refi Plus (DU or manual). In most cases the LPMI was added after the loan was funded, this is what is creating the “Credit Enhancement” road block many people are running into. You would want to discuss your potential options with Fannie Mae or your current lender.
I’ve received expanded approval feedback from Fannie Mae, is there anything I can do?
T
here are certain things that can be done to overcome the expanded approval feedback, at this time I’d like to keep that information proprietary. However if you’re trying to be approved after receiving Expanded approval feedback, shoot me an e-mail and I can give you some advice.
How much cash reserves do I need to qualify?

For an owner occupied home you will need to show 2 months of reserves in liquid assets. For non-owner occupied residences you must show 6 months of reserves.
Is there anything that helps my application be approved?

Yes, here’s what I’ve seen help: Positive net worth, high income, good credit history and scores, reducing the term of the loan, paying closing costs out of pocket, ASSETS (401K, Stocks, Bonds, Money Market, IRA, CalPERS, CalSTERS…etc)
Can I add a co-borrower to the loan?

Yes, one of the borrowers on the old loan must remain on the new loan.
Can I remove a borrower from the loan?

Yes, you must provide evidence that the remaining borrower has made the mortgage payments out of their own funds for the past 12 months. The remaining borrower will also still have to qualify.
Do Property Taxes & Insurance HAVE to be impounded?

Under most circumstances – Yes. There are exceptions to this rule: If your current LTV is less than 90% and your loan did NOT have impounds you can keep them separate. ANY loan-to-value above 90% will require impounds.
Can I refinance an Investment Property or Second Home under HARP?

Yes, Investment properties and second homes are eligible under HARP.
Does HARP require Mortgage Insurance?

No, the only time HARP would require mortgage insurance is when the loan being refinanced currently has MI. If your loan has MI now, the same coverage will be transferred to the new loan. If you paid MI in a single premium you will not have an additional payment on the new HARP refinance for MI because you’ve already paid it in full.

If you have LPMI (Lender Paid Mortgage Insurance) at many times the MI was built into the interest rate you’re paying now, that will change to a monthly premium rather than through the interest rate.
Is there a maximum number of properties I can have financed?

Freddie Mac – Yes, you cannot have more than 4 properties financed.

Fannie Mae – If the subject property is owner occupied, there is no limit to the number of properties that a borrower may own or have financed. If the property is an investment home the maximum number of properties may own or be obligated on is 4. There is an exception to the rule, as long as you enter into a fixed rate product via the HARP program you can have more than 4 properties financed. Ultimately Fannie Mae DOES have a multiple property program available. Under this program you must have 6 months of reserves on EVERY property you own.

If you have any further questions, please don't hesitate to contact me on my information below.

I'm here to help!
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,100
181
63
San Diego, California
www.loansreduced.com
Hi Gee,
HARP is still available until the end of September, as long as you have an application in process before then you can still fund the loan after. HARP doesn't have a 1.0, 2.0 or 3.0, you may be confusing it with the HAMP program or the Home Affordable Modification Program (instead of "Refinance" program).

This program does have payment history requirements, off the top of my head you cannot have more than one 60 day delinquency or two 30 day delinquencies within the past year. You really again must be thinking of the HAMP program, here is a link to our forum that goes over loan modifications: http://www.loansafe.org/forum/forums/loan-modification.9/

That thread may suit what you're looking to accomplish better than this one. I am not really familiar with the different loan modifications any longer as they have evolved significantly since I helped people in that situation however there are thousands of people on this forum that are in a situation like yours.

Also in regards to your investor, I haven't seen many loans if any really that had Fannie or Freddie as their investor be sold to another institution, that's really strange. I hope it all works out the best in the long run for you.

For People Seeking HARP: If you would like to make sure your application gets in before the end date, feel free to apply here: www.LoansReduced.com
 
A

Anxious and Worried

Guest
My trial payments with HARP are due on the first of the month. Because the first been falling on the weekend the payments were made on the 2nd and on the 3rd. Would this be a problem. My home persavation counselor said its wont be a problem but I can help to worry.