Good morning and Happy Holiday.
I received a lot of response to my post yesterday about the new HARP loan limits as high as 125%. It is always gratifying to me to see that a lot of you read my emails. However, it was apparent that many of you are confused about the email, so I'd like to clarify.
As a reminder, the HARP program was initiated to make it possible for those of you who currently have mortgages owned by either Fannie or Freddie, to refinance your loans at the lower rates, in spite of the fact that you owe more than your house is currently worth. With HARP refinances, you are not permitted to get cash back. You are permitted to refi for the purpose of lowering your rate, and therefore lowering your monthly payments to help you through this economic crisis.
When HARP was rolled out in February, housing values had not fallen as much as they have now. The lending limit was set at a loan amount of up to 105% of the appraised value of your home. Since home values have continued to drop, the lending limit has been raised to 125% of the appraised value. This has been done to allow more of you to take advantage of this program. If you have not checked in the past, or if you checked in the past and got a NO response, please click on the links below to find out if your current mortgage is owned by either Fannie or Freddie now. Some mortgages were reporting incorrectly, and Fannie and Freddie have purchased more existing mortgages.
https://ww3.freddiemac.com/corporate/
http://loanlookup.fanniemae.com/loanlookup/
For those of you whose mortgages included mortgage insurance payments, technically you do qualify for a HARP refinance transaction. BUT, Fannie and Freddie are requiring that in order to get this refinance, you must still carry mortgage insurance on your loan. The problem is that there are no insurers willing to insure this loan, so the reality is that you still cannot refinance your loan. In my less than humble opinion, this is not fair. Many borrowers who DO qualify for HARP funding, have a 1st and 2nd mortgage, rather than mortgage insurance, and never had more equity than you.
We in the lending industry, are campaigning on your behalf, with Congress and with Fannie and Freddie, to have this mortgage insurance requirement deleted. In our opinion, you are being unfairly discriminated against because you perhaps bought your house later in the game, or you didn't have the 20% down payment when you purchased or refinanced, or you didn't get a 1st/2nd mortgage combo loan when you purchased. If you have good credit, a good payment history, and a steady source of income, why should some people have an opportunity you are being denied?
You need to take steps to try to help yourselves, because this affects a LOT of you. When we in the mortgage industry talk to our Congressional representatives, or lobby Fannie and Freddie, we are often perceived as looking after our own interests - more business. Of course we want more business, doesn't everybody? But, at the same time, we are the ones in the position of seeing, first hand, how many of you are being affected by this ruling. YOU have to speak out on your own behalf. Congress tends to "grease the squeakiest wheel," so if you make yourselves heard in huge numbers, perhaps someone will actually take notice. There is no reason why your loan, at 125% of appraised value, poses a higher risk to the lender than someone else, with the same, and potentially even less equity. Following are some speaking points I suggest you use, if you should decide to contact your Congressional representative:
1. My credit score is __________
2. I have owned my home for _______ years
3. I have NEVER been late on my mortgage payment
4. I have steady employment income and have been at my current job for _____ years.
5. So, why can't I refinance my ___% mortgage at today's lower rates, when someone else with all the same statistics can?
Be sure to start your correspondence or call with the fact that you want to qualify for a HARP loan, but have been denied because your current mortgage includes mortgage insurance.
To contact your Congressman, Senator, or Fannie Mae, click on the links below to be taken to their websites.
https://writerep.house.gov/writerep/welcome.shtml
http://www.senate.gov/general/contact_information/senators_cfm.cfm
http://www.fanniemae.com/contact/crc.jhtml;jsessionid=OKGECFH3RIXC5J2FECHSFGQ?p=Contact+Us
Please have a safe and happy holiday weekend.
Warm regards,
Shelby Bateson
Sr. Loan Officer
503-819-6545
http://www.shelbytncmortgage.com
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