Posted by 101livescan on 7/14/12 3:44pm
Msg #426860

BUSINESS REPORT~The Crhonical with Bloomberg

Harp 2 is starting to pay off for some deeply underwater homeowners like John Oliver of Vallejo.
Oliver and his wife owed $372,000 on their home, now worth about $230,000. With a loan-to-value ratio of 161 percent,
Oliver had little hope of refinancing his 5.875-percent mortgage until he read that the government was liberalizing its
Home Affordable Refinance Program for loans backed by Fannie Mae and Freddie Mac.
Last fall, the government said it would remove the 125 percent LTV cap and loosen other restrictions that had prevented
many homeowners from refinancing under the original Harp. The expanded program, dubbed Harp 2, didn't get into full
swing until mid-March.
When Oliver called Chase, his mortgage servicer, to apply for the program around December, "they were putting people
with LTVs over 125 percent on a waiting list," he says. Oliver was somewhat surprised to get a call from Chase in the
spring saying he was eligible to proceed.
The Olivers had only 21 years remaining on their original mortgage, so rather than refinance into a new 30-year loan, they
took out a 15-year loan at 3.5 percent with no closing costs.
"We will be paying roughly $300 more per month, but we are saving $171,000 over the course of the loan," says Oliver,
who closed a few weeks ago.
Requirements
To qualify for Harp 2, borrowers must be current on their payments, and have a source of income and a loan that was
purchased by Fannie or Freddie before June 1, 2009. The balance must be at least 80 percent of the home's current value.
They are ineligible if they already refinanced under Harp. Banks can impose their own requirements on top of these basic
Fannie/Freddie rules.
On June 1, the Federal Housing Finance Agency reported that total Harp refinances had jumped to 180,185 in the first
quarter of this year - almost double the number done in the previous quarter.
But they still accounted for only 15 percent of all Fannie and Freddie refis compared with 8 and 14 percent, respectively,
the previous two quarters.
The vast majority of Harp refis in the first quarter were loans with LTV ratios in the 80 to 105 percent range. Guy Cecala,
publisher of Inside Mortgage Finance, calls these loans the "low-hanging fruit lenders have been willing" to refinance.
Only 20 percent had LTVs between 105 and 125 percent and only 2 percent had LTVs greater than 125 percent.
That's not too surprising considering that Harp 2 was fully operational for only two weeks during the quarter.
Cecala predicts that Harp refis will reach 200,000 to 225,000 in the second quarter and peak in the third quarter, assuming
interest rates remain stable.
Starting last week, loans with LTVs greater than 125 percent can be bundled into securities sold to investors, although they
still must be segregated from other loans, Cecala says. That should give Harp 2 a big boost.
One obstacle for borrowers is that most big banks, including Bank of America and Chase, won't refinance a loan under
Harp 2 unless they already service it.

Reply by Joan Bergstrom on 7/14/12 8:41pm
Msg #426889

I got my loan lowered through Harp 2

Refinanced in April 2007 at 6.875% and it was one of those "pick a payment each month loans." I paid the principal and interest every month on time.

Fixed for 5 years and then could be adjusted to 9%.

I got a letter from Aurora Loan Company in March 2012 that said they were going to adjust my loan and it could go to 9% and that is when I decided that I wasn't going to keep my 2 bedroom condo in Riverside Ca.

I decided to buy a car (2012 Honda Civic for the gas mileage) and let the condo go into foreclosure. I wasn't going to have anywhere near my 800+ credit rating after I let the condo go into foreclosure and that is the reason I bought the car.

My payment under my loan in April 2012 was dropped to 2.35% and lowered my min payment to $1,006 from $1,650 and it is fixed for 300 months.

Aurora sold my loan the next month. I guess borrowers, like me are the new "low hanging fruit under Harp 2.

Reply by CentralNY on 7/14/12 9:00pm
Msg #426894

Re: I got my loan lowered through Harp 2

Joan, I think it is brave to tell us this. It sounds like it worked out for you. You can'r beat these rates but it was smart to buy the car, come what may. Good luck. It has been a crazy 5 years. Who knew. No body.

Reply by Joan Bergstrom on 7/14/12 9:41pm
Msg #426897

Re: I got my loan lowered through Harp 2

Talk about getting the "brass ring!"

I had picked up the mail and my son, James, was visiting and he said "are you okay"? I said "not only am I okay, let's go celebrate!!

Reply by 101livescan on 7/15/12 7:33am
Msg #426910

Re: I got my loan lowered through Harp 2

It helps that you're in a hot bed of foreclosure land, Joan. In Santa Barbara county, banks can't wait to grab up properties. They are ON IT, like a cheap three pc suit. Hoping the current legislature to help homeowners just introduced into law this month will assist more people to keep there homes. Of course, they have to have income/assets to show they can make payments on modified loan.

Four years ago, when banks started making loan modifications, people who got them at 2 percent were overjoyed. Now, four years later they find their values are much lower and and they are back up to 5 percent soon. Will banks do another modification? Sure hope so.

We're a long way from coming back in the housing market sector for sure.

Congratulations! Hope you celebrated and are still celebrating!

Reply by MW/VA on 7/15/12 9:09am
Msg #426916

I have a Harp2 refi in process right now and expect to

close in a couple of weeks. There's no LTV requirement. Otherwise, I've had all the hoops to go through (documentation, documentation, documentation). Values continue to drop. The equity I had in a conventional loan disappeared. Like a lot of American's, the thought has crossed my mind a no. of times whether to just walk away or not. This will take me from 6% to 3.5%. I'm kind of glad my current lender sold my loan to Fannie Mae.

Reply by NVLSlady/VA on 7/15/12 4:23pm
Msg #426953

Harp 2.0

Joan & Marilynn: These are the "feel-good" comments that make me Smile. It's the part of my business I really like. Homeowners are so grateful when a negative (LTV issue) gets turned into a big Positive - through an opportunity like the Home Affordable Refinance Program. Fixed Rates below 4%!! This criteria enhancement is Really something to cheer about. A lot of us who were in the mortgage banking industry have decided to "keep one foot in" during this time of refinance expansion - and hearing stories like these makes it all worth it (:

Michelle

________________
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:
• http://fanniemae.com/loanlookup/
• http://freddiemac.com/mymortgage