As soon as again there is excitement in the mortgage industry mainly because of the new HARP 2. guidelines which had been released on November 15, 2011. For the most element the original HARP which was passed in 2009 as the Making Residence Very affordable program or the Obama Refi strategy has been a failure. Quite couple of people were able to qualify for the program and these who did qualify were only able to refinance at a lower rate and did not see the actual principal balance of their loan decreased.
The newest Harp guidelines will permit even more many people to qualify because the loan to value limit was eliminated. The old recommendations left millions of homeowners out due to loan to value restrictions of 105%-125%. There are no loan to value restrictions with the new HARP on 30 year fixed loans.
As prior to, the HARP system was not intended to assist property owners delay or steer clear of foreclosure. If you are behind on payments you will not be eligible for a HARP refinance. Your house loan ought to be paid on-time for the prior 6 months, and at least 11 of the most recent 12 months in order to refinance with HARP. Furthermore, your mortgage should have been sold to Fannie or Freddie prior to June 1, 2009 and if you refinanced beneath the old HARP you cannot use it again - only 1 HARP refinance per mortgage is allowed.
An additional drawback that remains with the newest HARP is that only homeowners with Fannie Mae or Freddie Mac backed mortgages are eligible. Non-conforming loans such as jumbo mortgages as effectively as FHA and USDA mortgages are deemed ineligible for HARP.
The most significant question remains. If a homeowner is upside down on their mortgage, do they honestly want to refinance an beneath water loan figuring out that it could take five-10 years to recover the lost equity? For some homeowners with jumbo mortgages in California, Nevada, Arizona and Florida it is not uncommon to be many hundred thousand dollars upside down. Situations such as this seem to have no viable answer and lots of of these homeowners are becoming told to just walk away.
As a matter of truth, these upside down jumbo mortgages have turn out to be the region of greatest risk for most lenders. 4 out of the top ten lenders in the nation are now proactively contacting these borrowers to encourage them not to walk away. These lenders are in fact showing their concern about these mortgages and this has opened a window of opportunity for jumbo mortgage payors who are upside down.
With the support of creative 3rd party investors, jumbo mortgage borrowers who are open to creative problem solving are escaping their upside down mortgages and refinancing at 80% loan to present value. The procedure is fairly effortless but suprisingly most refinancing lenders are unaware of the solution and turn away upside down jumbo refinances and the massive commissions they can pay.
Mortgage brokers who are partnering with the exact same 3rd party investors and offering this solution to their clients are enjoying a good deal of good results and a big enhance to their business enterprise.
