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Archive for Home Affordable Refinance

Over the last six years, most of the country has reported negative equity from declining home sales and foreclosures. Most homeowners find themselves stuck with an upside down mortgage because their balance owed is more than the property is worth. Millions of applicants have been turned down for refinancing because they have an “underwater mortgage”, until this new program hits the streets.

Will the Government Shut Off the Aid to Borrowers that Need a No Equity Refinance?

There have been many government loan programs that have attempted to help distressed borrowers with underwater refinancing but very few have succeeded. The FHASecure, Hope for Homeowners, EHLP, HAMP, Fannie Mae Du Refi-Plus and the Home Affordable Refinance Program all provided a program to refinance underwater mortgages, but very few loans were closed when it was all said and done. On paper, these relief plans all looked great, but when the lenders and insurance companies read the fine print of these programs they were turned off. They offered a path to achieve a low fixed interest rate with loan to values ranging from 105 to 125% but lenders never felt comfortable originating the underwater mortgage programs mostly because the risk was too great. These federal programs neglected to solve the risk factors most refinance lenders were simply not willing to take.

Finally the Federal Government, Fannie Mae, Freddie Mac and FHA came together to overcome the obstacles that lenders and insurance companies had and they rolled out several solutions for distressed borrowers to actually achieve an underwater mortgage refinance. With home values going up and down like a row boat drifting out to sea with hurricane swells, it became clear that a 125% cap on loan to value ratios was not enough nationally. In many regions like Arizona, California, Nevada, Florida, Georgia New Jersey, Maryland and Virginia, loan to values greatly exceeded the 125% threshold. We saw reports of upside down mortgages at 200 and 300% loan to value in some hard-hit regions. So the only way to overcome the negative equity dilemma was to completely scrap the ratio between loan balance and property value. The other issue was the “lender risk”, so the Federal Agencies agreed to minimize the risk so that loan companies and banks would participate in the underwater refinance programs. The HARP 2.0 was born with loan to value limits and limited liabilities for HARP lenders.

1. Are you eligible for no equity refinancing from one of the government sponsored entities like Fannie Mae or Freddie Mac? You may have an upside down mortgage, but your lien must be owned or serviced by Fannie Mae(FNMA) or Freddie Mac(FMCC) and have been closed prior to June 1, 2009.

2. Verify with Fannie Mae whether your 1st loan online is owned by them > Fannie Mae Loan Look Up

3. Check to see if Freddie Mac owns your mortgage > See if Freddie Own Your Home Loan

4. Verify if you meet the 80% minimum loan to value criteria under the HARP 2.0 guidelines

5. Are you below the 45% maximum debt to income ratio limit?

According to a KBW Research report, over than 1.6 million homeowner have closed on a HARP refinance loan to date, of which 618,217 refinances took place in 2012. The reality is that the pool of qualified HARP applicants is shrinking significantly. Many consumers bought homes in the U.S. after the “May 31, 2009” cut-off that Fannie and Freddie require for refinancing under the HARP umbrella. That means that there are tens of millions who have an underwater mortgage but do not meet HARP requirements to refinance.

Looking forward at Obama’s second term, many finance analysts believe that the Obama Administration will have more liberty to take their mandate and force the issue of the Federal government’s role in housing and how it relates to the home finance industry. Only time will tell, but to Obama’s second term may lead to HARP 3 and the federal mandate that banks write-down mortgages to current values. Of course these are very controversial topics that you can expect to see fighting on the Hill as the Republican led Congress and the Democratic led Senate make these issues political.



As the elections draw closer, there is no doubt that the housing market will continue to be a paramount issue that both Obama and Romney will attempt to champion. The two leading forces that have been driving the mortgage market this year have been the record low rates and the Home Affordable Refinance Program also known as HARP 2.0. Millions of homeowner want to know—Is HARP 3.0 on the way?

Although gas prices have been soaring higher, Obama has the lowest home mortgage rates to boast about as the President makes his case for being reelected in November. The current 30-year mortgage rates sit at 3.5% for fixed interest programs from Fannie Mae, Freddie Mac and the FHA.

Romney remains positive in his speeches as he make his case for a faster recovery in the housing sector. Meanwhile, the Federal Reserve recently signaled that more bail-outs could be coming and Wall Street is has been like a see-saw lately with very little consumer confidence seen in the private sector lately.

The HARP 2.0 has seen mixed results so far this year. There are thousands of homeowners that have lowered their interest rate because of the HARP refinancing program. However, there have been thousands of Americans that did not meet the eligibility requirements and thus were turned away.

We continue to hear talk of the HARP 3.0 coming in 2013 that would look to help more homeowners that could not be reached in the second program. It’s no secret that lenders would welcome the HARP 3.0 if it truly helped by borrowers without increasing the lender’s risk.

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San Diego, California – One of the most common questions we get online today is in regards to HARP refinancing eligibility for people that have a second mortgage. The quick answer is YES, “The Home Affordable Refinance Program allows borrowers to refinance even if they have a 2nd mortgage.” NO, you cannot combine a 1st and 2nd mortgage together in a HARP refinance, but they will allow you to subordinate your current second lien and refinance your underwater 1st mortgage. So if you want to refinance under the HARP 2.0, your second mortgage lender must complete the subordination agreement. This makes choosing a HARP mortgage lender more important than ever, because you need to choose a company that has enough experience with the HARP 2.0 program that they handle the subordination end properly so that your loan will fund prior to your interest rate lock expiring. Get quotes from lenders offering mortgage pre-approvals that have experience subordinating with HARP 2.0.

HARP Refinancing with a Second Loan Being Subordinated is Allowed!

  • In most cases the lender you choose for the new HARP refinance will do the work to get your 2nd loan subordinated.
  • Of course it won’t hurt to let your 2nd mortgage lender know that you are refinancing your 1st lien and you will need their cooperation in the subordination process.
  • Ask how much they charge for the subordinating. (2nd lenders fees will vary)
  • Find out if getting the check to the 2nd lender upfront will streamline the process.

Unfortunately not all mortgage companies handle the subordination the same. If you are a hands’ on person who wants to help out then you need to know this up front.  Most borrowers do not want to deal with this, so they let their HARP lender handle the process of subordinating the 2nd mortgage. According to Pat O’Connell of VIP Mortgage in Orange County, choosing lenders for HARP is important. “It is imperative that you feel confident that your lender can handle the subordination process, because the average loan company will drop the ball.”

Refinancing with HARP Can Save You Thousands of Dollars a Year!

If you want to refinance with HARP will save you money every month than most likely it will be worth it for you to move forward even if you have to deal with a subordinating a 2nd loan. We suggest adding 15 days to your rate lock or floating the rate. For example, if you were refinancing with a 30-day lock, stretch it to 45-days if you have a second mortgage.

Today’s HARP rates have fallen to 3.5% (APR 3.74%) on thirty-year terms and 2.875% (APR 2.97%) on fifteen-year options. So use the rate calculators and do the math so you can determine how much you are saving. If you can save $600 a year then it is likely worth your time. If you are saving $2,000 or $3,000 a month like many of our clients then it is certainly worth the time. Take a few minutes and apply online for unique refinancing even if you have a 2nd mortgage the option is available for a HARP refinance.


The Home Affordable Refinance Program, which is now called HARP 2.0, has given new hope to homeowners that have been put in the corner from banks because they do not have enough equity in their home. Traditional refinance programs require home equity to be considered as sufficient collateral. The latest loan term for these types of homeowners is “underwater mortgage”, because the balance on the mortgage is greater than the home’s value, thus the term, “underwater.”

Fannie and Freddie Eliminated LTV Caps on the HARP Refinance Program

If you thought the 125% loans were aggressive, wait until you read about the latest HARP refinance guidelines that have absolutely omitted all “loan to value” requirements to refinance. The gives HARP mortgage lenders “Cart Blanche” to offer 200% and even 300% LTV refinancing in severely underwater regions like California, Florida, Nevada, New York, Virginia and Washington.

One of the most important steps for underwater homeowners is educated themselves. In addition to speaking with HARP mortgage lenders and finance professionals, we suggest reading the following articles below:

  • How to Refinance With No Equity
  • HARP Lenders for Refinance

Check out a few of the important HARP 2.0 requirements that we highlighted below:

  • Mortgage lien must have been sold to Freddie Mac or Fannie Mae before June 1, 2009
  • To qualify a borrower cannot be late on their mortgage payment. (Also, cannot have has any late payments reported in the past six months.
  • The borrower is allowed to have one payment reported late in the past year.
  • The borrower must be at a minimum of 80% “loan to value” presently
  • Applicant cannot have completed a mortgage refinance through the 1st Home Affordable Refinance Program or HARP 2.0.

Nationwide wants to stress now more than ever is the time to compare HARP mortgage lenders because rates and costs can vary significantly. Don’t forget to factor in “service” when shop HARP lenders either because underwriting advice and processing efficiencies can also range drastically as well. At this time, the Home Affordable Refinance Program is only valid until December 31, 2013.

If you believe that have a 1st mortgage owned by Fannie Mae, you may qualify for the HARP2.0, so you can get more help online at  If you think your loan is owned or serviced by Freddie Mac, get more info on HARP refinancing program now at

If you still aren’t sure, we recommend discussing your goals with a Nationwide loan officer who will help determine if you meet the parameters for a refinance with the HARP 2.0.


How to Determine Eligibility for Home Affordable Refinance Program

As you may have heard, President Obama recently called for additional mortgage assistance programs to alleviate financial stress caused by the housing crisis and refinancing obstacles that have delayed resolutions for millions of homeowners. A few months back the President sent Congress a mandate to streamline the Home Affordable Refinance Program 2.0. The biggest change with the HARP 2.0 is the that there is no longer a loan to value limitation of 125% as specified in the original Home Affordable Refinance. The Federal Government has made sure that underwater borrowers can now get access to refinancing even if their mortgage balance greatly exceeds the property’s appraised value.

If you have a mortgage that is owned by Fannie Mae, Freddie Mac or insured by the Federal Housing Administration then you may be a candidate for this unique refinance mortgage. We encourage you to contact a Nationwide representative to discuss whether or not you are a good candidate for the Home Affordable Refinance. To help you further understand this program and the eligibility requirements to facilitate refinancing we have outlined a few common questions with solutions below.

Question: How do we find out if we are a homeowner that meets the HARP requirements?

Answer: Please visit each of the following links to determine if your borrower is eligible for Fannie Mae, Freddie Mac, or FHA refinance loans under the HARP umbrella:

Fannie Mae:  or you can get answers by telephone at 1-800-7FANNIE.

Freddie Mac:  or contact them by telephone at 1-800-FREDDIE.

Question: Will Nationwide lenders continue to offer the HARP mortgages or loans from the DU “Refi Plus”proigram?

Answer:  Most Nationwide lenders have introduced the HARP 2.0 program. Our loan consultants are well versed on the expanded HARP guidelines to enable high LTV refinancing beyond 125%. Once the proposed changes become effective, Nationwide will quickly update our lending parameters so borrowers can benefit from HARP 2.0.

Question: Does your institution have to be specifically approved to be able to offer the HARP loans?

Answer:  Most of the Nationwide lenders have been approved by Fannie Mae and Freddie Mac, so in most cases we our agents will at least be able to help determine your eligibility with respect to HARP refinancing.

Additional Home Affordable Refinance Resources:

Of course if you have unanswered questions or need help understanding HARP guidelines you can go to the government agencies directly. Make sure that you inquiry about any changes or as the Home Affordable Refinance Program is expanding frequently.  We hope that these links below help you get you closer to a refinancing solution:


Fannie Mae:

NOTE: All HARP mortgage products need to be accompanied by an AUS approval in order to be eligible for the HARP program. There are specific features of the Home Affordable Refinance that have not been rolled out or for approval yet so contacting these agencies individually may be a good idea depending upon your circumstances. With respect to Nationwide lenders, AUS approval does not necessarily dictate HARP acceptance or commit the loan company to refinancing beyond 100%.


Underwater homeowners have new possibilities with the Home Affordable Refinance Program 2.0.  There is no longer loan to value limitations with the HARP mortgage program. Loan to value is no longer restricted to 125% by Fannie Mae or Freddie Mac. If you have a mortgage that is owned by Fannie or Freddie and find yourself with a mortgage greater than your property’s value, you should submit your application for mortgage refinancing with HARP.

Are HARP Loans Avaiable Now?

Yes. Mortgage lenders are currently offering the Home Affordable Refinance programs with the expanded guidelines enabling for loan to value’s beyond 125% with no cap.

  • No mortgage delinquency allowed in the most recent 6 month period, with only one delinquency allowed in months 7-12 in any eligible loan.
  • The requirements that the original home loan must have met the bankruptcy and foreclosure policies in effect at the time the loan was originated has been removed by FNMA.
  • Fainnie Mae is updating the borrower benefit requirement to include a reduction in interest rate or reduction in loan amortization as eligible borrower benefits

HARP Mortgage Resources:

For more information directly from the agencies regarding these newly expanded products please feel free to review the direct updates at the following links:

Comments (2)

The discussion of homeowners who are stuck with underwater mortgages is an important one because in the past people who own real estate typically spend more money. With our economy on the brink of a double-dip recession, many economists are keeping a close eye on the housing sector and the quarterly data as it is released. CoreLogic reported that 7 out of 10 homeowners with less than 20% home equity in their real estate investment are paying above market levels on the home loan interest rate and may be unable to refinance in order to take advantage of the current record low rates.

Will the New Home Affordable Refinance Guidelines Help Millions of Struggling Homeowners? Many lenders are concerned that Fannie Mae and Freddie Mac continue to postpone the release of the HARP program that promised to have no loan to value restrictions. The first version of the HARP mortgage extended refinancing to borrowers up to 125% loan to value, but the new and improved HARP loans will have no restrictions.  For example if a borrower has a $350,000 mortgage on their home in California that is only appraised for $185,000, the borrower would qualify to refinance into a low fixed rate as long as they meet the HARP requirements. (Qualified home mortgages must be owned by Freddie Mac or Fannie Mae and this option is only for 1st mortgages. Borrowers can not include a 2nd mortgage lien in their refinancing endeavors)

Don’t Wait to Refinance! There is no consistent data indicating that the housing crisis is going away. The housing data company also reported in their report highlighted negative equity indicating that 10.7 million, or 22.1%, of all residential properties with a mortgage were underwater at the end of the 3rd quarter of 2011. This is down a bit from 10.9 million homes in the 2nd quarter. An additional 2.4 million borrowers are below 95% loan to value in the third quarter. Keep in mind that guidelines for FHA mortgages require the minimum loan to value and purchase and refinancing loans at 96.5%. Together, negative equity and near-underwater home loans accounted for 27.1% of all residential properties with a mortgage nationally in the 3rd quarter, down from 27.5%in the previous quarter.