Underwater homeowners should continue shopping for a HARP refinance if their loan gets denied by the first bank.
Phoenix, Arizona (PRWEB) July 24, 2012
National Mortgage Lender Network, HARPMortgageLender.com (http://www.harpmortgagelender.com), blames hasty loan application denials for the most recent report of low HARP Refinance numbers for severely underwater homeowners provided by the Federal Housing Finance Agency (FHFA).
The recent changes to the Home Affordable Refinance Program (HARP 2.0) that went into effect in early 2012 were intended to expand HARP eligibility to millions of underwater homeowners by removing the loan to value caps, mortgage insurance challenges, appraisal requirements and other documentation roadblocks.
However, of the 297,103 total HARP refinances completed as reported by the FHFA year-to-date, only 11,118 (3.7%) are for the severely underwater homeowners who have an LTV of 125% or greater.
“Most mortgage banks were not prepared to lend above the 125% LTV cap when HARP 2.0 was released early this year, which is why so many underwater borrowers were denied initially for a HARP refinance,” explains Scott Nicholson, an Irvine, CA HARP Mortgage Lender.
“Based on feedback from our HARP refinance clients, it seems as though banks are simply denying applications due to LTV or other guidelines specific to that lender without educating the discouraged borrowers about the difference between being eligible for HARP according to the bank vs the Making Home Affordable Program,” states Nicholson.
“HARP 2.0 is not off to a good start. Yes, some homeowners are finding success but too many are being given false denials by lenders who are not offering the full range of benefits promised by HARP. More investor appetite for HARP 2.0 loans is what's needed to increase the success of the program. The guidelines are in place but the funding sources are not,” says Michael Mullin, a Seattle HARP Lender.
According to a series of recent studies conducted at the Paul Milstein Center for Real Estate at Columbia Business School, there are currently a total of 9.8 million Fannie Mae and Freddie Mac loans that were originated before June 1, 2009, have a 4.5% interest rate or higher and were current on their mortgage payments in May 2012.
This information suggests that millions of underwater homeowners are potentially eligible for a HARP refinance based on the current guidelines set forth by Making Home Affordable Program.
Mortgage professionals recommend that borrowers continue to shop around for a local HARP approved lender if they have been turned down or denied by the first bank they submit an application to.
About The Home Affordable Refinance Program (HARP 2.0):
In October 2011, the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac announced enhancements to the Home Affordable Refinance Program that make it easier for lenders to refinance HARP-eligible mortgages.
HARP is refinance program created to help responsible borrowers who have continued to make their mortgage payments, but may be unable to refinance over recent years due to a decline in their home value.
The Obama administration claims that HARP will save homeowners an average of $250 a month in mortgage payments, and that the Home Affordable Refinance Program overall will help an anticipated 4-5 million underwater homeowners.
About HARP Mortgage Lender:
HARP Mortgage Lender is a national online network of pre-approved home loan professionals and lending institutions who are authorized to participate in the Obama Administration’s updated versions of the Home Affordable Refinance Program (HARP 2.0 - 3.0). HARP Mortgage Lender is owned and operated by Best Rate Referrals (http://bestratereferrals.com/), a Nevada-based online publisher and mortgage technology firm that manages over 3,000 consumer-focused real estate and lending websites.