About Government Refinance and Home Purchase Programs

With so few banks fully participating in the HARP 2.0 program we are getting reports that the authorized lenders who are participating are beginning to experience delays in underwriting because of high demand for the program. Sources within participating banks tell us that underwriters who used to be able to complete a review of a file a few days after submission are now sometimes taking a couple of weeks to even get to files because of the volume being submitted. They expect the wait times to get longer an longer in the months to come as more borrowers become aware of the newly rolled out program.

We expect a similar underwriting traffic jam for FHA streamlines in June when the new FHA streamline program begins.

If you have a conventional loan backed by Fannie or Freddie and are interested in the HARP 2.0 program or if you have an FHA loan and are interested in the new FHA streamline program contact us in the sidebar right away to be connected with a participating authorized lender. The sooner you can start the process the better because as awareness of the program increases so will underwriting turn times.

As we have noted here recently the HARP 2.0 program is now up and running. A few authorized lenders are fully embracing the new program but most lenders/banks are either ignoring HARP 2.0 or only partially implementing it. (Contact us in the sidebar to be connected with an authorized lender that is fully implementing HARP 2.0).

As the HARP 2.0 program has gotten under way it has become evident that borrowers who currently have Fannie Mae loans have been getting appraisal waivers more often than borrowers who have Freddie Mac loans. The way the process works is the authorized bank inputs the loan details in the the Fannie or Freddie preliminary underwriting software and that software comes back with results, including preliminary approvals or denials and results on whether appraisals will be required or not. Early reports from participating lenders indicate that the Fannie Mae software has been waiving the appraisal more often than not. The Freddie Mac underwriting software has been much more likely to require an appraisal as part of the refinance process. There are rumors that the Freddie software will be getting an update and it will be easier to get an appraisal waiver with Freddie loans soon too but time will tell.

Of course in the end the appraisal is mostly an inconvenience because the HARP 2.0 program when fully implemented allows for refinances no matter how low the appraisal comes in. Still, avoiding the appraisal makes the refinance process go faster and saves borrowers a few hundreds dollars up front.

If you have an conventional loan backed by Fannie Mae or Freddie Mac (see here to check) and would like to learn more about the HARP 2.0 program or to be connected with a fully participating authorized lender/bank contact us in the sidebar.

The new FHA streamline program that was recently announced is set to go live in just over a month. Homeowners who got their current FHA loan prior to May of 2009 are eligible. The new program allows borrowers to replace their existing FHA loan with a new FHA loan at the current low interest rates without increasing monthly PMI, without adding any money to the loan balance, and without any closing costs. The FHA will start accepting these new streamline loans after June 11, 2012 but borrowers can begin the application process now in anticipation of the new program. If you have an FHA loan that is three years old or older contact us in the sidebar to learn more about this excellent new program.

After sinking to all time lows in February of this year mortgage interest rates slowly moved higher throughout the month of March. But a recent batch of bad economic news sent the stock market tumbling has helped mortgage interest rates to move lower again as well. As we have noted here in the past, mortgage interest rates tend to track the yields on the 10-year treasury note and when investors are fleeing stocks they often purchase more 10-yr T-Notes which in turn lowers the yield on those bonds. The current dip in mortgage interest rates is most likely associated with the less than stellar jobs report that came out last week as well as renewed debt crisis worries in Europe. Rates may not hit new record lows again but they are getting nearer to those record lows again this month.

Contact us in the sidebar right away to learn about the government-backed refinance programs that could help your family.

While most authorized lenders are still not fully participating in the HARP 2.0 program, a small but growing number of them on our list are. The early returns indicate that it remains easier to get a HARP 2.0 loan for Fannie Mae loans than for Freddie Mac loans. The same holds true for appraisals — the Fannie underwriting software is more likely to allow an appraisal waiver than the Freddie underwriting software. Nevertheless the program is fully operational now for both Fannie and Freddie conventional mortgages. The HARP 2.0 program is allowing refinances for underwater home mortgages regardless of loan to value ratios and it is allowing mortgage insurance to transfer. Those two things were not allowed with HARP 1.0.

Contact us in the sidebar today if you have a conventional mortgage that was originated prior to May of 2009. Odds are pretty good that your mortgage will be invested in behind the scenes by either Fannie or Freddie and if it is you could be a good candidate to significantly reduce your interest rate and monthly payments through the new HARP 2.0 program.