On Thursday April 11th, the Federal Housing Finance Agency (FHFA) directed Fannie Mae and Freddie Mac to extend the Home Affordable Refinance Program (San Diego HARP 2.0) by two years to December 31, 2015.
“More than 2 million homeowners have refinanced through HARP, proving it a useful tool for reducing risk,” said FHFA Acting Director Edward J. DeMarco. “We are extending the program so more underwater borrowers can benefit from lower interest rates.”
The extension of the San Diego HARP 2.0 Program is not a surprise since HARP refinances make up about 20% of the total refinance volume at this time. There may be as many as 2 million eligible borrowers who haven’t taken advantage of the HARP 2.0, according to analysts at Bank of America Merrill Lynch. We know that 1.1 million homeowners have refinanced using the HARP 2.0 program through 2012.
For those of you who may not be familiar with the HARP 2.0 Program yet, I have included a quick re-cap of the program.
The San Diego Harp 2.0 Refinance Program is offered on Fannie Mae and Freddie Mac owned loans and was designed to help borrowers who have lost equity over the last several years refinance their San Diego home loan with no maximum Loan to Value (LTV) without needing mortgage insurance.
Normally mortgage insurance would be required when the LTV is above 80%, but the HARP 2.0 program gives an exemption. The greatest benefit of this program is that it allows borrowers to lock in today’s low mortgage rates on a 30 year fixed.
Details of San Diego HARP 2.0 Refinance Program
Here are the requirements of the San Diego HARP 2.0 Refinance Program. First off, Fannie Mae or Freddie Mac has to be the current owner of your loan. This is not referring to who you make your monthly payment to. That is your servicer. The owner refers to who bought the loan on the secondary market. You can go to the two following websites to figure out if Fannie Mae or Freddie Mac owns your mortgage: http://www.fanniemae.com/loanlookup/ , https://ww3.freddiemac.com/corporate/ .
There is no maximum LTV or CLTV (combined loan to value if you have a first and a second). If you have a 2nd mortgage, we would have to get the current second lien holder to agree to subordinate to the first (most currently will, due to this programs availability and the fact that it puts the homeowner in a better financial position). Even though the program itself has no maximum LTV some lenders have implemented their own guidelines which spell out a max of 105% or 125%. Many times these caps will apply only to 2nd homes or investment properties.
The file would have to be run through either Fannie Mae or Freddie Mac’s automated underwriting system and get an approval for the San Diego HARP 2.0 Program. There are no minimum credit scores and the program is more lenient on debt to income ratios. In many cases, we can get an appraisal waiver if the property value is accepted by Fannie Mae or Freddie Mac, saving the cost of an appraisal.
The mortgage cannot have been refinanced under the HARP program previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009. The borrower must also be current on their mortgage payments with no late payments in the last six months and no more than one late payment in the last 12 months.
There are other requirements depending on the specific situation.
As a San Diego Mortgage Broker, I have assisted many clients over the last 3 years with the HARP 2.0 Program. If you have a scenario you want me to review please contact me at 619-312-0612 or fill out the Quick Quote to be contacted.