Harp 2 Refinancing Qualifications

As a Homeowner How Do I Know If I Qualify for HARP 2 Refinancing?

Harp 2 Refinancing QualificationsThere are new guidelines being released to qualify for HARP 2.
YES.  And more people will qualify for HARP program than ever before.
YES. The question remains…  “Will I qualify HARP 2?”
Here is how you can begin to know….


Step 1:
Who Owns My Loan?

You need to know if your loan is owned by either Fannie Mae (FNMA) or Freddie Mac (FHLMC).
It is not something you will know off the top of your head.  You must check the websites below AND call your lender to ask, “Who OWNS my loan?”  You are trying to find out who the investor is.  This is a different party in many cases from the company that collects your payments (the servicer).  Enter the information into each of the forms through the links below and also call your current servicer unless you get a “yes, match found” answer.

http://www.fanniemae.com/loanlookup/
https://ww3.freddiemac.com/corporate/

Step 2:
What if Fannie and Freddie Don’t Own My Loan?

If, at some point, you get a YES answer to either of these questions:  “Does Fannie Mae own my loan?”  or “Does Freddie Mac own my loan?”then you can proceed to step 3.

If you are getting a NO answer to the above questions you need to continue to try both links repeatedly (as FNMA and FHLMC both acquire loans) AND you need to call your lender. A NO answer generated from the forms on these links does NOT necessarily indicate that your loan is NOT owned by either of these entities.  Just entering information differently (IE misspelling, typos, abbreviations or missing information) from how it is in the lender’s system can produce a NO answer…

If you get a NO you will still want to consult with an experienced broker who works with many different lenders and can ascertain whether or not there is another program available to you. There ARE other programs available that do not involve either of these entities.  There are also potentially ways that you can improve your own situation to qualify for a refinance (IE paying down the loan, getting a second job, paying off debt, getting a “gift” from family, etc.).  If you get a NO you can also ask your current lender if they participate in the federal Making Home Affordable Program.

A definitive NO here is the end of the road for a HARP refinance for the time being but be sure to keep in touch with those sites and with an experienced lender to determine if something has changed.  If one thing is for sure, things change!  It has happened again and again over the last half decade as these programs have rolled out.

Step 3:
If you discover YES My Loan is Owned by Fannie Mae or Freddie Mac

Your loan IS owned by Fannie Mae or Freddie Mac.  Now what?!
You will potentially qualify under one of the following programs:

FNMA: DU REFI PLUS OR REFI PLUS

FHLMC: FREDDIE MAC RELIEF (I or II) OR FREDDIE MAC RELIEF OPEN ACCESS (I or II).

The difference between the “OR” programs above relies on who the servicer of the loan is.  One program is only available to the servicer of the current loan (sometimes through a broker) and the other is available to any lender who offers the loan product.  Some servicers do not exist any longer and some do not offer the specific program a borrower might need or the guidelines needed to qualify.  This is where it can get dicey and an experienced lender is necessary to help you determine where your loan qualifications might fit it.  And NO Lender is omnipotent so NEGU (never ever give up).

The first answer is TALK to an experienced lender, maybe even more than one.  Each bank offers a DIFFERENT VERSION of this product, therefore going to one bank, with one set of guidelines, may not be your solution.  One bank will still only go to 105% of the current home value with your loan balance, while another bank will go to 125% of the current property value.  If you have a second mortgage, that changes what you qualify for, as well.  Again, some banks will go higher on the COMBINED loan to value (meaning the balance now including the second mortgage loan balance versus the current propert value).  I must also add:  there are situations where I refer a client back to their original lender because the guidelines and/or the pricing might be better but I would definitely prefer to talk through the situation with the client FIRST to determine what makes the most sense for their particular situation.  Most borrower wants to talk to their servicer AND a trustworthy and experienced broker.  Sometimes a servicer will have different guidelines for their borrowers with loans already with them versus loans that are owned by a different lender as well.  Try to be sure you have an experienced loan officer with the servicer as well.  Not all loan officers are equal in terms of experience and knowledge and talking to the wrong person can get you the wrong answer as well.

I am seeing pricing and guidelines vary GREATLY from one lender to another.  Just because Fannie or Freddie “release” new guidelines does not mean that any specific lender will offer the program just as they release it.  Lenders have overlays, rules in addition to the guidelines, that will sometimes limit what is available through their bank.

AND, just because your loan is owned by Fannie Mae or Freddie Mac does not mean you qualify otherwise.

You will need to meet some other qualifications:

For example, your loan has to have been originated before 6/1/2009 if it is owned by Freddie Mac.  You can only take advantage of the program one time.  And your overall credit risk profile will still have to qualify through the electronic processing system as well.  It sounds like this system may “relax” sometime in March.

My recommendation is to talk to your lender now and get your HARP 2 refinancing application going.  When (and if) the flood gates do open on HARP 2 program, you want to be ready to go.

Remember, persistence is KEY when it comes to getting refinancing especially under HARP!  As is the EFFORT to keep trying!  AND, when you find a solution, do not wait for something better to come along.  SNATCH IT UP as fast as you can!

Author

Sheila Goulart- Siegel
President and Senior Loan Consultant
Synergy Financial Group
(949) 388-9254 ext. 101
(949) 388-9372 fax
DRE license #:    01247838
NMLS license #:  239691

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