HARP 2.0 - does this sound right?

**drala** · 05-18-2012, 02:52 PM

When inquiring about re-finance with my original loan holder, they (Wells Fargo) told me that I couldn't re-finance under HARP because I paid PMI upfront ("a lender assisted PMI") and therefore the loan doesn't qualify for HARP. We have great credit, good jobs, etc., just a home that has very little equity thanks to the real estate crash

I would love to lower the interest rate.

Does this sound right to those who know?

**thesomersteam** · 05-19-2012, 07:54 AM

I would contact a professional mortgage person locally. Can refer a few professionals to you. Unfortunately, the majority of the programs that have been introduced helps homeowners that are behind on their mortgage or even those "squatting" and not paying their mortgage at all, and very little has been done to help folks that have done everything right. If there were programs that allowed qualified homeowners to REFI their loans in the last year or two, that would have been instant stimulus to the economy. It is very very difficult for a lot of people to REFI for a number of reasons (might now show enough income, appraisal might be lower than what is owed, etc, etc) yet these folks have never missed a mortgage payment in their lifetime.

**ShoshTrvls** · 05-19-2012, 10:29 PM

HARP 2.0 is for borrowers who are current on their loans, but the loan must be owned by Freddie Mac or Fannie Mae. I don't know the PMI issue but I do know that the LTV must be greater than 80%.

**drala** · 05-20-2012, 09:36 AM

Are you sure about that LTV ratio? I thought that was the point of HARP.

**ShoshTrvls** · 05-20-2012, 03:02 PM

Originally Posted by drala

Are you sure about that LTV ratio? I thought that was the point of HARP.

Yes. If your loan is 80% or more of the value of your home (that is, you have 20% or less in equity), then you may qualify.

As to the OP, while HARP presumably helps borrowers, it does so is by offering guaranties that reduce the lenders' risk of loss if the loan defaults and the lender has to foreclose on a house that is underwater. Thinking about what you were told, by paying PMI, your lender has already insured against at least some loss of equity, which may be why your loan is not eligible for HARP 2.0.

**Jerry19127** · 05-20-2012, 04:20 PM

You are not eligible for HARP because you are paying PMI. If you put down 20% or more when you purchased the home, have not been late 30 days or more in the last 6 months, your loan was guaranteed before 5/31/09, and your loan is insured via Fannie or Freddie, you will qualify. Keep in mind that lenders also have their own "overlays" or rules because they are petrified of any "buyback" where Fannie or Freddie makes them purchase the loan. With government oversight, there is pressure for them to turn a profit and they are pushing many loans back to the banks because of loan quality . For anyone going through a refinance or purchase at this time, you must be patient . You are going to need a ton of documentation , some redundant and some that may not make sense and the closing turnaround times are longer than in the past.

HARP 2 has no loan to value limits if you qualify. If you do not qualify for HARP but you still have 5% equity, it still might benefit you to refinance. PMI insurers have reduced their monthly premiums for people with 760 + credit.

**ShaunP** · 05-25-2012, 09:56 AM

You can take advantage of the HARP program even if you are paying PMI, I do these every day. There may be other reasons why you wouldn't be eligible, but that isn't one of them.

**glaren** · 08-13-2012, 08:15 PM

drala - I am dealing with exact thing right now. I tried to refinance through HARP with a different bank and they said wells fargo wouldn't transfer the PMI to them to allow me to refinance. They said I must do it through wells fargo. I then tried doing it through wells fargo and they said they can't because I paid my PMI up front vs monthly. they said it was a system limitation. Did you get anywhere? WEre you ever able to refinance through HARP?

**Poweltonian** · 08-15-2012, 04:19 PM

Originally Posted by glaren

drala - I am dealing with exact thing right now. I tried to refinance through HARP with a different bank and they said wells fargo wouldn't transfer the PMI to them to allow me to refinance. They said I must do it through wells fargo. I then tried doing it through wells fargo and they said they can't because I paid my PMI up front vs monthly. they said it was a system limitation. Did you get anywhere? WEre you ever able to refinance through HARP?

Can't you refinance through Wells Fargo though? We pay PMI, and refinanced through HARP with Wells Fargo (which was also the previous mortgage) and everything went smoothly. We may have gotten a slightly better rate with a different lender, but only by a small fraction of a percent.

**glaren** · 08-15-2012, 09:26 PM

No. I tried doing it through wells Fargo and they said since I paid up front pmi, they couldn't do it due to system limitations. Did you pay up front pmi on previous Liam?

**the mule** · 08-16-2012, 11:00 PM

Originally Posted by Jerry19127

You are not eligible for HARP because you are paying PMI. If you put down 20% or more when you purchased the home, have not been late 30 days or more in the last 6 months, your loan was guaranteed before 5/31/09, and your loan is insured via Fannie or Freddie, you will qualify.

It's the other way around. If your equity is 20% or more you do not qualify for HARP.

**Poweltonian** · 08-17-2012, 12:21 PM

Originally Posted by glaren

Did you pay up front pmi on previous Liam?

Oh, sorry. I misunderstood. We pay monthly.

**hutad** · 08-28-2012, 04:20 PM

I've read this thread and there seems to be some misunderstandings...

I've posted some Q/As that I found online at some sites. Hopefully this helps:

Q: I put down 20% when I bought my home. My home is now underwater. If I refinance with HARP, will I have to pay mortgage insurance now?
A: No, you won’t need to pay mortgage insurance. If your current loan doesn’t require PMI, your new loan won’t require it, either.

Q. I pay PMI now. Will my PMI payments go up with a new HARP refinance?

A. No, your private mortgage insurance payments will not increase. However, it is possible that the “transfer” of your mortgage insurance policy may require an extra step. To make sure there are no hiccups, simply remind your lender that you’re paying PMI to help the refinance process move more smoothly.

Q. My bank says I can’t refinance with HARP 2.0 because I have PMI. Is that true?

A. No, it’s not true. You can refinance via HARP 2.0 even if your current mortgage has private mortgage insurance. It may require a few extra steps but this should not stop the refi process.

Q.Why does my loan officer tell me I can’t refinance with HARP because my current mortgage has PMI?

A. This is simply not the case. If you’re hearing that you can’t refinance your current mortgage because it has PMI on it, your loan officer isn’t up to speed on this program. If that’s the case, you should shop around and look for someone else that is an expert with this program.

I found this information here:
HARP Loan Frequently Asked Questions

**drala** · 03-07-2013, 11:12 AM

Just an update on my original post. So Wells Fargo is now interested in doing a refinance...no talk of HARP, lender paid PMI, etc. Just a straightforward refi at a competitive rate, with no appraisal, etc. I have no idea what the difference if between last spring and this spring (mysterious terrain to me, this mortgage business..). But if you have been trying to refinance with your bank and running into barriers, you might want to try now.

**thesomersteam** · 03-09-2013, 04:32 PM

Originally Posted by drala

Just an update on my original post. So Wells Fargo is now interested in doing a refinance...no talk of HARP, lender paid PMI, etc. Just a straightforward refi at a competitive rate, with no appraisal, etc. I have no idea what the difference if between last spring and this spring (mysterious terrain to me, this mortgage business..). But if you have been trying to refinance with your bank and running into barriers, you might want to try now.

Congrats on that Drala. Being able to REFI is like instant stimulus with the 60 year historical low interest rates. I just had success (although a long process) with 2 HARP REFIS for condos. Went to Bank of America (who was holding the loan) and both settled in the last 2 months. They did an appraisal on both of them although it was not a requirement for the REFI to go through. Went from mid 6's down to mid 4's and am thrilled.

The good news is that lenders are slowly starting to loosen up the guidelines for various programs.

Now I wish there was an option for all homeowners to do a HARP-like REFI whose loan is not owned by Fannie Mae or Freddie Mac. I know they have been working on that, all the way up to the President but just has been finalized as of yet. Hopefully that will happen before rates start to trickle back up which I predict will happen the second half of the year.

~ Chris

**Julia1020** · 03-13-2013, 03:17 PM

Originally Posted by Jerry19127

You are not eligible for HARP because you are paying PMI. If you put down 20% or more when you purchased the home, have not been late 30 days or more in the last 6 months, your loan was guaranteed before 5/31/09, and your loan is insured via Fannie or Freddie, you will qualify. Keep in mind that lenders also have their own "overlays" or rules because they are petrified of any "buyback" where Fannie or Freddie makes them purchase the loan. With government oversight, there is pressure for them to turn a profit and they are pushing many loans back to the banks because of loan quality . For anyone going through a refinance or purchase at this time, you must be patient . You are going to need a ton of documentation , some redundant and some that may not make sense and the closing turnaround times are longer than in the past.

HARP 2 has no loan to value limits if you qualify. If you do not qualify for HARP but you still have 5% equity, it still might benefit you to refinance. PMI insurers have reduced their monthly premiums for people with 760 + credit.

Any chance that a HARP 3 could be in the future? Have friend who refinanced under HARP 1 after 5/31/09 (which made him ineligible for HARP 2 and the lower interest rates that could now otherwise apply had he not refied under HARP 1). He put 20% down, has never been late on a payment and has a credit score above 700....but cannot do a regular non-HARP refi now because the house is under water (Cherry Hill)....So, basically, he can't really sell the house and also cannot refi to grab current rates before the sneak back up again.