HARP 2.0

November 17th, 2011

HARP 2.0 is now only two weeks away.  The new guidelines were released this week and below are the MAIN changes. 

REMINDER:  A HARP loan is a product that allows homeowners backed by a Fannie Mae or Freddie Mac loan the ability to refinance their loan at up to 125% of the value with no mortgage insurance as long as they don’t have it currently.  The original loan must have been delivered to Fannie Mae or Freddie Mac by May of 2009. 

HARP 2.0:

1.)  Starts with applications dated December 1st or later.

2.)  The biggest change – removing the 125% barrier for fixed loans.  There is an unlimited LTV for fixed loans and a max 105% LTV for ARM loans and loans with terms over 30 years.

3.)  Another biggie – eliminates the need for an appraisal or automated valuation model to complete the loan.

4.)  Allows 1 30 day late in the past 12 months – as long as it is not within the most recent 6 months.

5.)  Before, you had to have the same occupancy as when you took out the original loan.  This has now been lifted.  For example, you could not complete a HARP loan on an original primary residence that is now a rental.  Now you can.

6.)  Fannie Mae is removing the waiting periods for short sales and foreclosures for this product.

What do you think of these changes?  The first version of HARP did not help nearly as many people as projected – Will these new changes be more effective in helping homeowners with little to no equity improve their rate and stay in their home?

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