Obama HARP Program-Do You Qualify?

 

The Obama administration is rolling out an updated version of the HARP program, also called HARP 2 and home affordable refinance program, designed to help homeowners who are current on their mortgage but lack equity which is needed to get out from underneath their existing real estate loan so that they can take advantage of today’s low rates.

One thing to keep in mind is that banks are not required to participate in the program and if they do, each lender can add their own rules on top of, also called overlays, the HARP program guidelines.  In short, the HARP program guidelines can and will vary for each lender.  So which lender is going to have the best and most consumer friendly HARP program?  It remains to be seen.  Click here to see if you qualify for the HARP program or keep reading below.

Lenders use automated underwriting systems to get loans approved.  FNMA and Freddie Mac will have their automated systems updated to reflect the HARP changes by mid March of 2012.  The lenders offering the HARP program right now are manually underwriting the program, which is a bit more of a difficult task vs. the automated version.  Look for more lenders to be offering the HARP program after mid March when the AUS systems are updated.

So what new changes to the HARP program are going to help you refinance?  For starters the value of your home won’t be an issue.  You can have a home worth $200,000 and owe $300,000 and it won’t matter.    An appraisal however will be required to make sure the home is in lending condition.   Credit score requirements will be relaxed but still good credit will be needed.  You must also be current on your existing mortgage with no lates in the past 12 months.  If you have PMI insurance, you are still eligible for HARP and you can even use your existing PMI carrier.  You may also switch lenders with HARP 2, so you don’t have to stay with your existing lender.

If your property has been for sale, HARP says you are still eligible.  If the home is now a rental property, HARP is okay with that as well.  Loans greater than $417,000 may also be eligible under HARP.  The new HARP program is also friendly for lenders as well due to relaxed FNMA and Freddie Mac relaxing their buyback policy put forth on lenders in case the loan goes into default.

As long as your real estate loan was originated after June 1 2009, the HARP program may be an option for you.  The question is, how is one lender to another going to implement HARP.  Are they going to adhere to the new HARP guidelines as written?  Or are they going to put in place a blanket of additional overlays making it a useless program?

There are lenders who are not waiting for the mid March 2012 FNMA and Freddie Mac automated underwriting system update and are funding HARP 2 loans with minimal overlays as we speak.  Is the HARP program right for you?  Do you qualify for the new home affordable refinance program?  Click here to find out.

Best,

KW

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