Hardly Anyone can Refinance Program or Harp 2.0

We are closing HARP 2.0 loans. The following is what we have learned so far:

  • Please contact Sherlock Holmes, it is a mystery why some borrowers are others are not.
  • Interest rates may not be equal for borrowers with higher loan-to values, or self-employed, commissioned or if the homeowner has mortgage insurance.
  • Freddie Mac’s home valuation process implanted in the system is at least six months behind our increasing values. As of April 28th, Fannie will “enhance” (their words, not mine) their system to include their own valuation
  • Closing costs are not equal. No upfront fees or out of pocket costs DOES NOT mean there are no closing costs. Beware of large Banks and their verbiage.
  • Freddie Mac requires some serious meds to get his automated system in working order. He turns down more loans than it approves. And Fannie Mae needs some extra strength Midol for her bi-polar decisions.

Virtually all lenders depend on the automated underwriting systems (AUS) They are truly artificial in their intelligence in determining approvals. AUS approvals are the guarantees from Fannie and Freddie validating they will take the loans. The fun we are having securing approvals! Why is the AUS asking for reserves? Why is it not taking the value? Fannie or Freddie may only issue an approval if the term is 20 or 25 years. Goodbye lower payment. Great credit score? Hold on mister, is that a new credit card in your pocket? Fannie may pull your approval.

Debra W. Still, Chairman-Elect of the Mortgage Bankers Association (MBA), testified before the Senate Banking Subcommittee on Housing, Transportation, and Community Development. In her statement she addressed the new “Responsible Homeowner Refinancing Act of 2012” currently under advisement. The new bill addresses and simplifies Fannie Mae and Freddie Mac’s borrower eligibility requirements. Right now each bank issues their own interpretation of HARP 2.0. She also supports the bill’s provision to prohibiting pricing differences based on loan to value ratios, borrower income or employment status. Also, to allow all lenders to participate on all HARP loans, not just the current servicers.

Question: How many government legislations will it take to enforce the banks to play fair with the underwater homeowners who would like to keep their homes?

FYI: If your loan originated with MetLife or Taylor, Bean & Whitaker or any lender no longer in business, your options may be limited.

Diane Gerdes