Fannie / Freddie “Streamlines’ are here! No appraisal…No Limit on LTV….Marginal Credit “OK”.

The new HARP “2. 0 program will start being funded March 17th 2012. Borrowers can begin applying immediately!!!!!!!!!!  Before the rush of applications begins bogging down lender’s capacity.

Here’s the basic criteria

Max. DTI is 45%.

No mortgage lates in the last 6 months.

Only one mortgage lates in the last 12 months.

Note: That investors/lenders may impose stricter criteria than those 3 listed above.

Most banks are not be participating in the program.

I’ve been told “off the record”: “Why would we (banks) wish to lower a borrower’s interest rate when they have good credit scores and no history of lates”.

In fact..there is a “full court” press on currently in Washington DC, to “kill this program in ” cradle”. (No wonder they are referred to as “banksters”).

A previous program has been available since December 2011… but borrowers were limited to 125% LTV. And was only moderately successful. Many borrower were just too far underwater to help.

This new program appears to be the “silver bullet” that will alleviate the housing crisis.

Here are the highlights of the HARP 2.0

1. The loan must be backed by Fannie Mae or Freddie Mac.

2. The current mortgage must have a securitization date prior to June 1, 2009.

3. In other words, you must have purchased or refinanced on your property before June 1, 2009.

4. The original loan amount was $417k or less

“HARP” 2.0  – Q and A

1) 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.

Go to www.fanniemae.com/loanlookup/.

If no match is found, https://ww3.freddiemac.com/corporate/ .

Your loan must appear on one of these two sites to be eligible for HARP.

2) Does HARP work the same with Fannie Mae as with Freddie Mac? Yes.

3) 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 refinance via HARP.

4) 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.

5) I am really far underwater on my mortgage. Can I use HARP? Yes. 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.

If you choose an adjustable-rate mortgage, your loan-to-value is capped at 105%.

6) Is mortgage insurance required for LTV ‘s greater than 80%. Only if the original loan had mortgage insurance.

7) Can borrower(s) be removed through the refinance transaction? Yes.

8) Is any “cash out” allowed on the refi? No…however you can roll into the loan impounds, loan fees and escrow costs into the loan.

9) Can I roll my “second/heloc”…into the refi? No. However…If the borrower has a “second/heloc” ..that investor may allow for a “subordination” of the 2nd loan.

Most lenders will co-operate ….but will restrict the increase of the 1st to just 10%….which should be acceptable.

10) What will be the rates? Rates are determined by credit score…and are slghty higher than market rates for Fannie Mae loan products.

11) Does this program cover investment property? Yes..but the LTV is limited to: 105%.

12) Is an appraisal required? Technically “Yes”. Borrowers with marginal credit scores AND high debt ratios MAY be required to have “appraisal“.

But the “appraisal” is simply a housing inspection to determine the CONDITION of the property.

13) What are the terms of the loan(s)? 30-20 and 15 yrs. Borrowers choosing the 20 or 15 year mortgage will have no appraisal requirement.

In Closing:

With the political climate in Washington DC, borrowers are advised to begin the process as soon as possible. Fannie and Freddie’s budget could be cut back at any time.

Borrowers are encouraged to apply now. Simply click on this link for a pre qual or basic loan application.

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