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HARP 2.0 Guidelines

Shawn Von Talge



04-13-2012

The talk as of late has been the “new and enhanced” guidelines of HARP (Home Affordable Refinance Program) 2.0. This particular program has been “sold” by our government as the save all antidote for today’s homeowner’s struggling to access the record low rates seen in our current environment. And although I strongly believe this program to be a huge help in allowing homeowner’s to refinance and access today’s rates. I am also realistic as to its shortcomings. With that said I wanted to highlight some of the key aspects of this program as seen from the secondary market side. You see there is a big difference to what this program will “allow” and what the secondary market will “accept”. So without further delay below are some brief points concerning Fannie Mae’s version known as the DU Refi Plus.
 

  • The current loan being refinanced must have been guaranteed by Fannie prior to June 1, 2009
  • Maximum cash-back to the client is $250.00
  • You are not allowed to “combine” mortgages (i.e. payoff a 1st and 2nd into one)
  • Existing second mortgages must be re-subordinated
  • Primary, second home and investment properties are eligible
  • No late payments the last 6 months and only 1 30 day late the last 12
  • Dropping of co-borrowers IS allowed provided they’ve made the last 12 payments on their own
  • The addition of a borrower IS allowed provided the original borrower remains on the loan
  • Occupancy status change since the original loan IS OK (i.e. Originally primary and now Investment property)
  • The loan servicing company determines in large part what can be done & the guidelines involved (i.e. credit score, debt-to-income ratio, etc.)
  • PIW (Property Inspection Waivers) will be a common place meaning loans with no appraisals should be the norm

 
There are obviously other points to this program so consult a Mortgage Professional for the correct answers!
 
Sincere Thanks!
 
Shawn Von Talge
Senior Mortgage Banker
 

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