What options do I have for Freddie Mac refinance under Harp 2? My mortage is $208,000 and my home value is $155,000.

Asked by Nancy Higgins, 85014 Fri Jul 20, 2012

I have $40,000 available to put down towards principal to lower mortgage amount. Should I recontact the servicer now?

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Bill Parker,…, , Scottsdale, AZ
Fri Jul 20, 2012
Hi Nancy:

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*
NMLS #223607
1 vote
, ,
Tue Apr 2, 2013
Nancy, As a Mortgage Banker with Pinnacle Capital Mortgage, a direct Fannie Mae and Freddie Mac lender, I am helping complete a number of HARP 2.0 refinances. Some of these transactions are more complicated than others but they are getting refinanced.

You can recontact your servicer. Hopefully they are willing and able to help you and wish to do so. If they do not or you are not willing to gamble your families finances on their helpful customer service, you can contact a Mortgage Banker, such as myself, who has the resources and program that is available to help you. The advantages of this is You get to benefit and to experience a high level of client service with a large direct lender with small time custmer service and knowledge to assist YOU. Our time frame is between 30-45 days.

We base the value of your home by Freddie Mac's automated underwriting system almost all the time. You home value could and probably will be different.
0 votes
Voices Member, , Phoenix, AZ
Mon Apr 1, 2013
under harp 2.0, you don't need to put down $40k. harp 2.0 was designed for underwater borrowers. under a normal refinance, an appraisal is used and there has to be equity. with harp 2.0, an appraisal isn't used; an bpo is used instead and as a result, this would allow you to refi.
0 votes
, ,
Fri Aug 24, 2012
Nancy, have you arranged to get your loan refinanced yet? If not as a mortgage lender/banker, I would be pleased to assist you in a timely and professional manner.
0 votes
Bill Parker,…, , Scottsdale, AZ
Fri Jul 20, 2012

Jennie, that is not always the case. In fact, it is OFTEN not the case, as many servicers are not doing these loans, as discussed below. And, if they are, they are quite limited in what they are offering.

As I mentioned, other lenders are sending me their clients as their banks are not offering this...

Take care.
0 votes
Jennie Miller…, Agent, Phoenix, AZ
Fri Jul 20, 2012
Call your lender that holds your first mortgage. They will be able to do this for you.
0 votes
, ,
Fri Jul 20, 2012
Hi Nancy,

We are one of the few direct lender / servicer that can refinance your loan through the HARP 2.0 program, even if we do not service your loan, even if you are upside down on your mortgage, meaning that even though you owe $208,000 on your loan and your home is valued at $155,000, provided you have a good credit score and you meet meet other normal Freddie Mac (or Fannie Mae or Ginnie Mae) lending guidelines. It will not matter which bank is servicing your loan for us to refinance an under water loan.

Please feel free to contact me directly if you have any further questions, I'd be glad to help.

All the best,

Roswell Moore, CMPS
Certified Mortgage Planner
480-422-5095 direct

We are a Direct Lender, Mortgage Bank where we originate, process, underwrite, fund, AND SERVICE our loans, in-house, with FHA (starting at a 580 score AND still only 3.5% down), FHA Streamline refinance loans (NO minimum credit score, NO appraisal required) Go Green rehab loans, HomePath, Investor Friendly (10 financed properties), VA, VA IRRRL refinance loans (NO appraisal required), USDA loans, Jumbo loans, Conventional loans, plus, we allow Escrow Hold-Backs!
0 votes
Bill Parker,…, , Scottsdale, AZ
Fri Jul 20, 2012
Hi Loren, et al:

Nancy indicates in her question that she has "$40,000 available to put down".

In this example, she would need to come in with the difference between the 105% value ($162,750) and the amount owed ($208,000 - $40,000 = $168,000), plus closing costs and prepaids, if applicable. It is not necessary to bring in the $40,000; borrower's option.

As many are aware, the borrower could also accept an incrementally higher interest rate, which allows for monies from the lender to be used to pay some or all of these additional costs.

I hope this helps explain borrowers' options.

Bill Parker
NMLS #223607
0 votes
Loren Hoboy, Agent, Phoenix, AZ
Fri Jul 20, 2012
Bill, can you explain the $40,000 shown in your calculations and where this figure comes from?

"An in-house lender will go to 105% on Freddie Mac primary residences ($$155,000 * 1.05 = $162,750; $208,000 - $40,000 = $168,000; so close). "

In this example will the Borrower need to come up with the difference between the $155K and the $168K? How does that work?

Loren Hoboy-Realtor
Central AZ Real Estate
0 votes
$40K comes from buyers question, "I have $40,000 available to put down towards principal". The short coming is between the $168,000 (balance less $40K down) and $162,750 (105% of value).
Flag Fri Jul 20, 2012
Jason Webb, Agent, Glendale, AZ
Fri Jul 20, 2012
0 votes
, ,
Fri Jul 20, 2012
I wouldn't necessarily go back to your servicer. We can do the refi for you without putting any money toward the principal. If you want to pay down the principal you can. If your balance is below 125% of the value, then there are more options, but I would really suggest a thorough analysis of your situation before deciding on the beat plan.

Let me know if you'd like do discuss your particular situation further.

Brian Cardenas, Sr. Mortgage Banker
AmeriFirst Financial, Inc.
Mobile: 480.233.7897
0 votes
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