The H.A.R.P., Home Affordability Refinance Program, program offered to Fannie Mae or Freddie Mac mortgage note owners to refinance at today’s lower rates. So simply yes the program works. The program allows for home owners to refinance regardless to your loan to value. The catch is your mortgage most be owned by Fannie Mae or Freddie Mac before May 31, 2009. So who owns your mortgage note?
Most people do not relies that the bank they are paying their current monthly mortgage bill to does not own their mortgage note. Most of the time the bank you make your monthly payment to is acting as a “Servicer” for that actual mortgage note holder. You can do a web search for does Fannie Mae or does Freddie Mac own my loan and follow the steps. If you have a loan match before May 31, 2009 then you are eligible for the program.
Here is the tricky part, you have to find the right Lender to meet your needs. May people get discouraged because they get told their bank cannot do their loan. Well this is correct more times than not. The reason is because not all mortgage lenders offer the program as it is intended. Banks, Brokers or Mortgage Bankers offer programs with what they feel is safe to them. This is very complex but if you think of banks as car deals this makes more sense. For example you would not take your Chevy to the Toyota dealer to get fixed. Yes the people at the Toyota Dealer could get the job done in most cases but not efficiently. So your cost would be much higher than if you just took your car to the Chevy dealer to begin with. The average person simplifies the mortgage process and yes the banks take advantage of this lack of knowledge. Was anyone surprised that Wells Fargo posted huge profits as few months ago? All of the big banks are doing very well in a down economy, imagine that.
So what is the HARP program? The HARP program is a refinance opportunity that allow you to refinance your current loan to a new 30 year fixed mortgage. HARP is not a loan modification. The program does not require you to be late on your mortgage payment and it does not damage your credit score. Frankly if rewards those people that are keeping up with their mortgage payments.
There is only one company that I am aware of that offer the HARP program regardless to your loan to value. It is MN Capital and you can visit them on line at www.mn-capital.com
The HARP program is currently scheduled in terminate on Dec. of 2013. If you are still considering taking advantage of the HARP program then you might want to get moving before the program is over. With the rising real estate values there is little reason for Congress to extend the current HARP program or roll out the rumored HARP 3 program.
I sat down with the Broker of MN Capital, Michael TenEyck, and we discussed the HARP program in detail. We both came to the same conclusion that the media does not explain the program correctly so how is the average homeowner to even know it is an available option. Most people seem to think that the HARP program is a loan modification program or it will damage their credit. That could not be any further from the truth! I will list several points to the program that are the most common misunderstood.
What is the HARP 2.0 Program? The program allows mortgage note holders of Fannie Mae or Freddie Mac the option to refinance their existing mortgage regardless of your current loan to value.
I make my payments to Bank “X” so don’t they own my loan? – Well in many cases the Bank you make your payment to does not own your mortgage note. Many mortgages are owned my Hedge Funds, Fannie Mae and Freddie Mac.
My Bank says I do not qualify do to my LTV – This is very common as many banks have self-imposed restrictions that they have placed on the HARP 2.0 program. As stated above the program does not have loan to value restrictions. Banks provide a service to the actual mortgage note holder as a “Servicer” much like a property manager does if you have every rented a place to live.
So how can MN Capital refinance my mortgage with the HARP 2.0 Program and my bank cannot? – If you are not in the finance business you most likely would not be in a position to understand that banks do not like all loan programs. If you were to think of the banks as Car Dealerships then this makes more sense. For example you would not take your Ford to the Chevy Dealer for repairs. So for my auto metaphor your loan program is your type of vehicle. The difficult part is to fully understanding the proper Lender or Broker that you need to use to max your benefit as there is no sticker price to start from.
Do I need an appraisal? – In most cases no. The loan to value is not a factor for approval but with that said there are some restrictions in terms of rate if your LTV is over 125%. The impact is generally within .125% in terms of rate.
The HARP 2.0 program is only available to property owners with mortgage notes that are owned by either Fannie Mae or Freddie Mac. Currently Congress is working out the details for HARP 3.0 which should open up the program for all property owners. The one unknown is will the current note holders participate in the program. This would require the current note holders to take a reduced return on their investment. As a property owner this sounds great as you benefit from a reduce payment but there is one serious issue. Most of the additional mortgage notes are funded with 401K money. So that right we will experience a reduced return on our 401K investments. So at this time is it unclear how Congress will entice the Hedge Fund Managers to exercise the HARP 3.0 option. Time will tell.
MN Capital has answers to many questions on thier website at – www.mn-capital.com. You can also ask property specific questions at email@example.com.
Many people today do not relies that there are mortgage options available for properties with negative equity. I recently spoke with the Broker of MN Capital, Michael TenEyck, and was surprised to learn that a home value is irrelevant when refinancing with the HARP 2.0 program. Many Lender’s will tell you otherwise as they have self-imposed loan to value limitations within guidelines. TenEyck gave me two examples of HARP 2.0 loan that MN Capital has recently closed which I will share below;
Owner Occupied property
- Homes Value - $225,000
- Loan amount - $340,000
- Current Loan to Value – 151%
- New Loan – 30 Year Fixed at 4.25%
- Homes Value - $230,000
- Loan amount - $315,000
- Current Loan to Value –136%
- New Loan – 30 Year Fixed at 4.50%
The above loan structures are deals that I have not seen done by any other Lender to date. The HARP 2.0 loan program only has a few qualifying requirements. Your loan must be owned by Fannie Mae or Freddie Mac prior to June 1st of 2009. You will need to meet forgiving debt to income and credit ratio requirements for the HARP 2.0 program. There are a few other items needed to qualify but those are the two major items. To find out if your loan is owned by Famine Mae or Freddie Mac click on the below links and follow the instructions. Do not be fouled thinking that your loan is owned by a major bank because you make your payment to them. Banks today, in many cases, act much like a property manager does when you rent an apartment but that is a topic for a later date. It only takes a few minutes to find out and the reduce mortgage rate could benefit you greatly.
Fannie Mae – http://www.fanniemae.com/loanlookup/
Freddie Mac – https://ww3.freddiemac.com/corporate/
If you have spoken with your lender and they told you they could not help you due to your debt it income, loan to value or if you have existing mortgage insurance then MN Capital might be able to help. I asked the mortgage insurance question of the broker and the answer was clear. If you have mortgage insurance before the HARP 2.0 refinance then you will have it after. If you do not currently have mortgage insurance before the HARP 2.0 refinance then you will not have mortgage insurance with the new loan. There are even a few ways to eliminate mortgage insurance after you refinance with the HARP 2.0 program. You would have to speak with the Broker to get your individual details as it is different with ever borrower.
You can reach MN Capital online at - www.mn-capital.com
I have had some trouble with the mortgage industry the last few months with all of the claims of “how to tell if you are getting a good deal” with the worst advice being to get a minimum of six offers. Well to get six offers you will have six inquires on your credit which will cause delays when it comes time for funding for letters of explanation or even worse a lower credit score. These articles seem to be written to get readers to come back to a website as this is not truly sound advice. Yes get offers but six is a bit extreme.
Your best option has allows been and still remains to use a professional fully licensed mortgage broker. Make sure they hold a DRE and a NMLS license which you can confirm with only a few minutes on line. This way you know you are dealing with a true mortgage professional.
Merry Christmas From The Huntington Beach Mortgage Oracle