I am doing a number of HARP 2.0 refinances. As one of my clients said to me the other day, "(You) are one of the few lenders out there with lenders which will do these deals." He stated there were only about 2 lenders in the whole country. I am not sure if that is true, but it gives you an idea of how the market is handling Freddie Mac HARP 2.0. For some reason, Freddie Mac is not as widely available as Fannie Mae.
Not to mention, other loan officers in my office and from OTHER banks are sending me their deals rather than deal with the complexities and frustrations associated with getting these deals through the arduous process that lenders have imposed on the program.
You do have a couple of options available, however. You can recontact your servicer, as you suggest, and hope they are able to help you and wish to do so. The problems I have seen with this option are: Most are extremely busy and taking a long time to process the loans, and, due to you being part of a captive audience, they do not necessarily offer you the best rates and fees available, and, many simply do not offer HARP 2.0.
Or, you can approach a Mortgage Banker or Broker, such as myself, whom will have the ability to shop the market and find you other choices. I have two: An in-house lender which will go to 105% on Freddie Mac primary residences ($$155,000 * 1.05 = $162,750; $208,000 - $40,000 = $168,000; so close). The advantages of this option are: You get to work with me (wink) and experience a high level of client service; the rate I quote will be the best available to me; and the timing is about one-third that of the other options.
Or, you can not put all that money into your home and go with the other lender I have doing Freddie Mac HARP 2.0 loans (unlimited loan-to-value, as HARP 2.0 was meant to be before the Big Banks got a hold of it). This will take much longer (about 3 months--remember, they are the only game in town, so extremely busy) and the rate will be a bit higher (Supply and Demand--only game in town = higher rates).
One thing I should point out. You say your home value is $155,000. I am not sure what you are basing this on, but the accepted value will be determined by Freddie Mac's automated underwriting system 98% of the time. Not by looking on-line, nor by an appraisal. So, the numbers above could change.
Good luck, whatever you decide to do.
Bill Parker, CPA*