HARP 2.0 Program – Underwater Homeoweners In Wisconisn

This updated refinance program, HARP 2.0, has been helping many underwater homeowners in Wisconsin.  Many homeowners are reading different guidelines from different lenders with this program.  This will happen, because each lender may create their own guidelines for HARP 2.0.

Here are some basic guidelines to help you understand what is allowed with HARP 2.0.  You always want to check with the lender you plan on working with first, in order to make sure your situation will qualify.

Guidelines To Follow

  • Fannie or Freddie Backed - Your mortgage needs to be backed by Fannie Mae or Freddie Mac in order to qualify.  Also, your mortgage had to be received by Fannie Mae or Freddie Mac before June 1, 2009.  Here are the website’s to look up your mortgage with Fannie and Freddie:
  • No LTV Limit - You can have little to no equity or be completely underwater on your mortgage.  There is no cap to how far underwater you are.  Some big banks have a cap to their LTV (loan to value), so you should check with a local mortgage company to find those that do not have a cap.  A Wisconsin lender that has no cap to the LTV for HARP 2.0 is Joshua Bucio.  Read more at http://www.milwaukeeharprefinance.com
  • No Appraisal - Just about all of the HARP approvals are receiving a waiver on the appraisal report.  This means you will not be required to appraise the home.  This will help reduce your costs and streamline the process of your refinance.
  • Eligible Properties - Your primary residence, second homes and investment properties all qualify for the HARP 2.0 program.  Your property can even be a multi-unit, up to 4 units total.
  • Second Mortgage - If you have a second mortgage or home equity line of credit, you can still refinance with the HARP program.  You cannot payoff the second mortgage with the refinance, so you have to keep it open.  This program is only for first mortgages.
  • Mortgage Insurance - If you currently have a mortgage insurance (aka PMI) payment, as part of your total payment, that’s ok.  The mortgage insurance on your current mortgage will be transferred to your new mortgage loan.  This will not hold you back from qualifying for HARP 2.0.

Please keep in mind many of the big banks have many more strict guidelines than most local mortgage companies.  It may not be your best choice to use a big bank.  Take the time to contact a local mortgage company that helps with the HARP refinance program.

we're having a mini refi boom, can you hear it??

Hey, it’s nothing like the tsunamis we’ve seen but it’s a reasonably steady trickle. I don’t know about you, but I’ll take trickles any day. Trickles can mean survival in markets like this.

What’s happening? Prime people who were put into subprime crap by less than scrupulous lenders are moving into safe products.

So, anyway, this being my first post on Lenderama, I thought I’d chat about refinancing and offer a couple of tips from the title world.

Oh, please excuse my total lack of decorum…..

HELLO, LENDERAMA PEOPLE! I am really pleased to be here and look forward to some good give and take.

OK, so back to refis. Here are the tips:

1. Do not, DO NOT, DO NOT…..proceed into a mortgage refinance application without first looking at an actual mortgage payoff figure. I am not talking about a principal balance. You have to contact the lender and request a payoff. Your borrower may have to do this for you because the mortgage lender will want authorization. Some lenders will provide verbal payoffs in an automated system. Others will fax them in a few days. There may be a small fee to produce a figure but it’s worth it.

Why? Because the principal balance is just one part of an actual payoff. The lender will add interest, possible a prepayment penalty and other fees or charges. These extra dollars may blow your transaction or at least make your borrower angry.

Trust me, you do not want to be on the eve of your closing and have the title agent call and say your borrower needs extra money to close. No way. When we have to make that kind of call and there’s a pregnant pause, we almost always know that all of the calculations done by the loan officer/broker were based upon the principal balance.

Why will the lender add interest? Well, mortgage interest is paid in arrears. That means that when you made your mortgage payment for November, you actually paid the interest for October. So, if you were intending to payoff your mortgage on December 18th, the mortgage lender would add 30 days of interest for November and 18 days for December and that kind of money might be more than your borrower is prepared to ante up for closing.

[Frankly, I've always wondered why listing real estate agents don't order a payoff on the seller's mortgage before spending all of that time and effort on marketing. You have no idea if your seller is upside down on the transaction without an actual payoff letter in hand.]

2. Be aware of the next due dates for property taxes and hazard insurance. A title agent may be put in a Catch 22 situation if taxes are currently due and payable, the current mortgage lender has debited the escrow account for taxes and the tax collector has not yet received the payment.

Unless the refinance is taking place with the very same lender, the title agent will be forced to collect the taxes from the borrower at closing and hold the payment until the tax collector posts the receipt. Your borrower may not be in a position to ante up the cash AND they’ll be pretty upset if they get this news on the eve of the closing.

If you are a loan officer/broker reading this post, just remember, we know you may be desperate for the deal and afraid to ask for too much information up front, but trust me, your customer will appreciate your professionalism. Just explain the pitfalls and that you need to make certain that all figures have been considered. If your competition is clueless, it will make you look even better.

Now, go get em tiger.