Refinance Program - HARP 2.0
The wait is over for homeowners who want to refinance but owe more
on their mortgages than their homes are worth. East Coast Mortgage
Lenders, Inc is offering refinances through HARP 2.0, a program that
allows borrowers to refinance regardless of how deeply underwater
In places that were hit hardest by the housing downturn, homeowners
have been waiting to refinance under HARP 2.0 for months, as it is
their only chance to refinance at a lower rate.
This program is going to be a very big deal for places like Florida
and will help a lot of responsible borrowers.
HARP 2.0, a revamped version
of the Home Affordable Refinance Program, was announced
in October 2011. Until now, only a limited number of borrowers
had access to it. Although a few national lenders started to offer
HARP 2.0 refinances to their own customers earlier this year, most
lenders had to wait for Fannie Mae and Freddie Mac to update their
automated underwriting systems with the program's new rules. All
updates are now completed.
If you are turned down for HARP 2.0, it makes sense to talk to East
Coast Mortgage Lenders since we work with many lenders who are participating
in the program.
- Your mortgage must have been sold to Fannie Mae or Freddie
Mac before June 1, 2009.
- You must be current on the mortgage and have no late
payments in the last six months. A late payment is defined as one
that's more than 30 days overdue.
- You must not have more than one late payment in the past
- This must be your first refinance through HARP. If you
have refinanced under an earlier version of HARP, then you do not
HARP 2.0 Might Succeed
Borrowers have grown frustrated as they hear announcements of numerous
mortgage relief programs that do little to help them. But HARP 2.0
has the potential to succeed. Many of the obstacles borrowers faced
in earlier versions of HARP were removed. The program is expected
to help thousands of underwater borrowers lower their monthly house
The previous version of the program did not allow refinances for
borrowers who owed more than 125 percent of what their homes were
worth. That requirement stood as a major obstacle to thousands of
borrowers whose homes plunged in value. HARP 2.0 removes that cap.
HARP 2.0 releases the lender's liability on the original loan. In
short, that's a key incentive to get lenders to embrace the program.
With the previous version of HARP, many homeowners complained that
lenders wouldn't refinance more than 105 percent of a home's value,
even though the program's cap was 125 percent. Some feared lenders
would adopt a similar policy for HARP 2.0. East Coast Mortgage Lenders,
Inc. has several lenders who have removed the cap and are willing
to refinance according to the HARP 2.0 new guidelines.
Lenders may add their own internal requirements, called "overlays," to
the HARP 2.0 guidelines. Although there is no minimum credit score
to qualify for HARP 2.0, some lenders will require a minimum of 620.
At East Coast Mortgage Lenders we have lenders
that have no such overlays.
Lenders are required to verify income, employment and credit history
under HARP 2.0. but we have lenders that offer
HARP 2.0 refis with limited overlays, especially on primary homes.
Increased Demand Means Potential Delays
Bank of America, Wells and Chase say they have had a large volume
of applications from borrowers for the HARP 2.0 program since they
made it available to their existing customers.
Having been inundated with inquiries from borrowers, smaller lenders
and brokers such as East Coast Mortgage Lenders have gathered applications
and documents so they can process the refinances as soon as the system
As lenders become overwhelmed with the volume of applications, borrowers
should be prepared for delays. Talk to your loan officer and get
their feel for what's an appropriate length of time for closing.
Lock your rate accordingly. At East Coast Mortgage Lenders, we can
turn your refinance around in just 30 days.
Second Mortgages Not as Big of an Obstacle
If you have a second mortgage, you're more likely to encounter delays.
That's because the second mortgage lender has to sign off on the
refinance, agreeing to subordinate the loan to the lender who refinances
the first mortgage.
But the good news is, lenders will be more willing to sign off on
HARP 2.0 refinances than they were with the previous version of HARP,
industry experts say.
If you have to subordinate, you'll have some delays, maybe 30 to
45 days, but it should not hold anybody back.
For more information about HARP, please contact
Michael Pollis at East Coast Mortgage Lenders, Inc.