This page is dedicated to HARP 2.0 borrowers who have a Freddie Mac high loan to value loan (above 125% loan to value).

Unfortunately, as you may have experienced, there have been challenges in the process for refinancing a Freddie Mac higher “loan to value” loan.  Many lenders have elected to not participate in the Freddie Mac program or put a cap on the loan to value (125%).  There are few lenders that will accept unlimited loan to value Freddie Mac loans.  Due to the volume and demand, the time frame for underwriting is a minimum of 90 days or possibly longer.

How is your loan to value determined?

When your file has been sent to Freddie Mac, they place a value on your property based off their own valuation system.  Freddie Mac gives and value called an “HVE” or Home Value Explorer.

The Good News

There has been a bill proposed in the Senate (S.170) called the “Helping Responsible Home-Owners Act 2012″ that may eliminate many of the barriers faced in this program.  Although this bill has gained much support, unfortunately we have to wait until the bill has passed for any changes.  You can contact our Arizona Senators HERE to help encourage them to support the bill.

If you have a Freddie Mac loan to value below 125%, the time frame for underwriting is 45 days.

Freddie Mac has fined tuned its automated underwriting process for the Home Affordable Refinance Program in a move that is expected to generate approvals for borrowers who were previously denied for the program.
HARP production exceeded 180,000 transactions during the first quarter, nearly doubling from the fourth quarter.

But few deeply underwater borrowers are actually benefiting from the program, while some small lenders are receiving caution ratings and larger lenders are being overwhelmed with inquiries.

In response to complaints from lenders, Freddie Mac this week will undertake a “fine-tuning” of its underwriting process, according to Freddie Mac spokesman Brad German. Specifics of how the automated underwriting models will be altered aren’t being disclosed, even to lenders, but some homeowners who have been turned down for the program may now qualify, he said.

“It will be a noticeable, positive change for the homeowner,” German said. “It will help increase the number of borrowers who can refinance under HARP and take advantage of today’s rates.”

President Obama said in his State of the Union address Tuesday that he will submit to Congress a plan that gives responsible homeowners the chance to refinance and save roughly $3,000 a year on their mortgage.

“No more red tape,” he said. “No more runaround from the banks.”

The legislation, he said, would be funded by a small fee charged to the largest banks. It will expand on the already widened Home Affordable Refinance Program. The Federal Housing Finance Agency eliminated barriers in November for Fannie Mae and Freddie Mac borrowers to refinance into historically low interest rates.

Nearly 11 million borrowers in the U.S. are underwater, roughly 22.5% of all outstanding loans, according to CoreLogic.  Another 2.4 million hold less than 5% equity in their homes.

In addition to the new assistance, Obama directed the U.S. Attorney General and leading state AGs to expand their investigations into mortgage fraud and other abusive practices that led to the housing crisis.

“This new unit,” he said, “will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans.”

In 2010, a multistate coalition of AGs, the Justice Department and federal agencies launched an investigation into apparent foreclosure mispractices at the major banks. More than one year later, a settlement draws near. But Obama said Tuesday the investigation will now span across lending and securitization issues.

New York AG Eric Schneiderman will head up the task force, his office said in a statement. Schneiderman was previously removed from the servicing negotiations because he wanted to shift the talks to securitization and other problems at major Wall Street firms.

“Some financial firms violate major anti-fraud laws because there’s no real penalty for being a repeat offender,” Obama said. “That’s bad for consumers, and it’s bad for the vast majority of bankers and financial service professionals who do the right thing.”

By: Catherine Reagor (of the Arizona Republic)

A long-awaited federal program will soon allow more Phoenix-area homeowners to refinance their mortgages and lower their payments in spite of owing far more than their homes are now worth.

The expansion of the Home Affordable Refinancing Plan will allow for new home loans in March, according to new details from the U.S. Department of Housing and Urban Development, and homeowners are already lining up to apply.

President Barack Obama announced the plan in October, and borrowers have awaited the details since.

The program targets homeowners who bought during the housing boom and have been unable to refinance up until now because their homes are no longer worth enough to secure a new mortgage through traditional refinancing.
An earlier version of HARP allowed homeowners with mortgages backed by two federal loan agencies to refinance, but only if their new loans were no more than 125 percent of their home’s current value. In metro Phoenix, where values have plunged by more than half since the market’s peak in 2006, that limit left many borrowers out.

The update to the program, which lenders refer to as HARP 2.0, lifts that loan-to-value restriction completely.

The goal is to help homeowners save money and fend off foreclosures by lowering payments.

For a typical $250,000 mortgage, a switch from a 6 percent rate to current rates of about 4 percent would cut the monthly payment by about $300.

“The expanded HARP program is only semistalled,” Hasson said.
He said other homeowners should call their servicers now to see if they can be approved early.

To qualify
The expanded refinancing program is available only to those with mortgages backed by Fannie Mae and Freddie Mac, but the two entities back more than half of all mortgages.

Eligible homeowners can have missed only one payment in the past year and must still bring in enough monthly income to afford their lower payment.
Some borrowers will be required to show proof they have the income to pay the lower mortgage payments, but the guidelines aren’t clear on who will be required to do this.

HUD Secretary Shaun Donovan told The Arizona Republic in October that part of the goal of expanding the refinancing program is to reward homeowners who have continued to pay their mortgages despite huge drops in their home’s values and potentially prevent more homeowners from walking away.

Estimates show nearly half of Arizona’s mortgage holders are underwater.
The previous HARP plan, which allowed homeowners to refinance if their loan-to-value ratio was 125 percent or lower, had the same intent. But it helped few metro Phoenix homeowners because home values in the region have plummeted 60 percent during the crash.

While the program will be expanded, some borrowers aren’t eligible.
Kim Baker has been in her Phoenix home for more than five years and owes at least 40 percent more on her mortgage than what her house is worth. She can’t refinance to reduce her 6.5 percent interest rate because her loan isn’t backed by Fannie or Freddie. She wants the federal government to give lenders an incentive to help homeowners like her, too.

“Otherwise, we’re stuck,” she said. “Can’t sell, can’t re-fi, can’t lower our payment, can’t move to a cheaper house down the street. We didn’t want to walk away or foreclose. So we keep paying every month hoping the economy turns around and maybe in several years we’ll break even.”