California HARP Lender: 855-674-8525
The California HARP Program has been expanded to help more homeowners qualify for refinancing their mortgage – even those with little or no equity available.
With the Oakland HARP you could take advantage of low interest rates and other refinancing benefits even if the value of your home has declined and you owe more than your home is worth.
We have listed the most common HARP Program Questions and Answers below asked by borrowers to give you a better understanding of how this program can help you, as well as further articulate some of the basic concepts of refinancing, equity and other options for underwater mortgage scenarios.
What does it mean to be upside down on my mortgage?
The terms “Upside Down” or “Underwater” simply mean that you owe more on your home loan than your property may appraise or sell for. The percentage that you are upside down is factored into what’s called a Loan-to-Value (LTV) ratio. So, if you owe $125,000 on a property that is valued at $100,000, then your LTV would be 125%.
With the new updates to the HARP 2.0 program, borrowers with an LTV ratio greater than 125% may now qualify for a new refinance, provided they meet the other criteria.
What is the difference between a refinance and a loan modification?
Basically, a modification is a change to an existing loan, where a refinance is a new loan. A Refinance on your loan means that you get a new loan to pay off an existing mortgage.
A modification is for borrowers who are behind on their mortgage payment, or struggling to remain current, and are either not eligible for a refinance or it will not help them maintain their payments.
What changes were made to HARP that may make me eligible now?
There were several changes to HARP, but the primary enhancement removed the limit on the amount that homeowners could be underwater (owe more on their mortgage than their home is worth). With that change, many homeowners who were not eligible will now qualify.
The amount a borrower owes on a mortgage compared to the appraised value of a property is called Loan-to-Value (LTV). With the release of “HARP 2.0” guidelines, the original 125% LTV Cap was lifted, which will essentially allow borrowers who owe more than 125% on their first mortgage the ability to qualify for a new refinance, provided they meet the other underwriting and program criteria.
Is HARP the only refinance program available for Oakland underwater homeowners?
HARP is one of several refinancing options available to eligible homeowners. However, HARP is a unique program for conventional loans that enables eligible borrowers with little to no equity in their homes to take advantage of low interest rates and other refinancing benefits.
FHA, VA and USDA also have refinance programs that are not restricted by appraisal or equity challenges. Call HARP Approval today at 855-674-8525 to speak with one of our lending professionals who can help find a program or alternative option for your underwater mortgage.
How can I find out whether my loan is owned by Fannie Mae or Freddie Mac?
Only mortgages owned or guaranteed by either Fannie Mae or Freddie Mac are eligible for refinance under the enhanced and expanded provisions of HARP. You can confirm that your mortgage is owned by either Fannie Mae or Freddie Mac by checking the following Web sites:
Who is Fannie Mae?
Fannie Mae is a government-chartered company with a mission to provide a stable source of funding to the U.S. housing and mortgage markets. The company purchases and securitizes mortgage loans to ensure that money is consistently available to financial institutions that lend money to homebuyers.
What is the difference between a lender and a servicer?
Your mortgage lender is the financial institution that gave you your mortgage loan. Your servicer is the financial institution that you send your monthly payment to.
Your servicer is responsible for collecting your payments and crediting your account. You can find your mortgage servicer contact information on your monthly statement or coupon book.
On The Fannie Mae loan look up tool, what does “Match Found” mean?
A “Match Found” response to your search in the Fannie Mae Loan Look up means that Fannie Mae owns a loan at the address entered in the search, however, it does not guarantee or imply that you will qualify for a Fannie Mae loan refinance or loan modification.
My loan is owned by Fannie, but it says that I don’t qualify for HARP?
This is because Fannie Mae needed to receive your loan on May 31, 2009 or before.
Does Fannie Mae own my first and second mortgage?
Fannie Mae generally owns primary (first-lien) mortgages only. A “Match Found” on the Fannie Mae Loan Look up Tool means that they own the primary mortgage on the address entered in the search field.
To find out who owns your second mortgage, refer to your monthly mortgage statement or contact the mortgage servicer to whom you send your monthly payment to.
What if I have an adjustable rate mortgage (ARM)?
HARP allows you to replace your adjustable-rate mortgage and many homeowners opt for a more stable fixed-rate mortgage.
Every adjustable-rate mortgage is different, but refinancing may still provide you with a lower monthly payment, and allow you to avoid the sometimes large payment increase that comes once your ARM initial rate ends. The stability of a fixed monthly payment will give you security in knowing what you’ll owe every month.
Will the lender require an appraisal with a new HARP loan?
Maybe – Even though the new updates to this program are intended to give borrowers with a Loan-to-Value (LTV) ratio above 125% the ability to refinance, lenders will still run an online valuation or require a full appraisal.
Fannie Mae and Freddie Mac are updating their systems as this program progresses, but a good rule-of-thumb to follow is that loans under 125% LTV will generally not have an appraisal.
If the appraisal is not conducted because of what is called PIW (Property Inspection Waiver), there will still be a $75 fees paid to Fannie Mae.
Irrespective of what the appraisal value comes out to be, the loan would go through.
However, some lenders may still cap the LTV to 150% – 200% or more, mainly depending on how the market reacts to this new program. Basically, expect LTV, Appraisal and Lending Limits to vary between lenders, and the time of the month.
Do I have to refinance through my current lender?
No – As of March 19, 2012, Fannie Mae and Freddie Mac have opened this program up to non-servicing mortgage lenders.
This is a huge benefit to borrowers in the fact that you have an opportunity to find a bank or mortgage broker who specializes in the new HARP program and can offer competitive rates.
Am I eligible for a refinance if my current loan has mortgage insurance (MI)?
Yes, and the good news is that most of the mortgage insurance companies are working with HARP lenders to make the process as seamless as possible.
Your new lender will do the work to make sure your current mortgage insurance scenario is similar to what you were, or were not paying.
Will I have to pay MI with a HARP since my new LTV will be >80%?
No – If you did not originally have mortgage insurance due to the fact that your original LTV was less than 80% when acquired that loan, you will not be required to have MI, even though your new Loan-to-Value ratio will be greater than 80%.
I did not put 20% down when I purchased my property, but I do not have MI?
If your current loan at the time of closing was over 80% and you are not paying a monthly Mortgage Insurance, most likely you have a Lender Paid Mortgage Insurance (LPMI). And yes, you would be able to refinance if you have an LPMI.
Your lender will simply need to transfer the same coverage level from your current MI company to the new HARP 2.0 Refinance.
Can I Combine My First And Second Mortgage Into The New HARP Refinance?
No – HARP does not allow for cash-out refinances or combining a first and second. Your new lender will order a subordination from your current second mortgage holder, which may require a fee.
To quote the guidelines: “The refinance will not have a cash-out component, except for closing costs and certain de minimis allowances to cover items such as association fees, property tax bills, insurance costs, and rounding adjustments.
**The VA Funding Fee can be waived for veterans with a service related disability, among other exceptions.
Will the lender need to verify income, assets and employment?
Fannie Mae doesn’t expressly ask for Income, Employment or Asset verification for HARP 2.0 Loans. But, Fannie Mae suggests that the lender must obtain a verbal verification of employment (VOE) and verify the borrower’ss source of non-employment income, plus obtain any other income documentation as required by the Underwriting Findings Report.
The borrower’s ability to repay the mortgage loan is based primarily on the acceptable payment history of the existing mortgage and the borrower benefit provisions. The acceptable payment history is no late in last 6 months and no more than one 30 days late in 7-12 months.
If the borrower’s principal and interest payment is increasing more than 20%, the borrower must be re-qualified for the new loan, including verification of all income sources and amounts, and verification of any assets needed to close.
Basically, your new lender will run your application through an online Fannie Mae or Freddie Mac approval engine, which will then provide a list of necessary documentation you need to prepare for loan submission.
Can I qualify for a new loan on an investment property or second home?
All occupancy types i.e. Primary Residence, Second Homes and Investment Properties are allowed with HARP, even if the occupancy type has changed since the time of the original loan.
Are All Borrowers on the existing mortgage required to be on the new loan?
Borrower(s) may be removed through the new transaction, provided that:
a) The lender obtains documented evidence that the remaining borrower has been making payments from his or her own funds for the past 12 months
b) The borrower(s) being removed is also removed from the deed.
If the borrower(s) is being removed due to death, however, evidence that the remaining borrower(s) has been making payments from his or her own funds is not required.
CLICK HERE to submit a contact request online and we will have one licensed California HARP Approval Network member connect with you asap. You can also feel free to Call us directly @ 855-674-8525 for any questions about HARP loans.