Home Affordable Refinance Program 2.

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The new enhanced Home Affordable Refinance Program guidelines were released as promised on November 15, 2011. This is for Fannie Mae and Freddie Mac loans only. You may look up to see if Fannie Mae owns your mortgage by clicking here; http://www.fanniemae.com/loanlookup/ and click here to see if your loan is owned by Freddie Mac; https://ww3.freddiemac.com/corporate/ If you wish to review the full guidelines I have included them in the below links. However, it is important to note that these are guidelines and the Banks will come up with their own interpretation. Fannie Mae and Freddie Mac buy loans, they do not fund loans. Therefore, we must be reminded that these guidelines must now be met up with originators such as BofA, Wells Fargo, Chase, Citi, etc. who will then in turn create their own internal guidelines, based on their interpretation of what Fannie and Freddie have put out. In addition, the lenders may have their own comfort level, company philosophy or other internal reasons for making the program more attractive, or less. http://www.freddiemac.com/sell/guide/bulletins/pdf/bll1122.pdf https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/sel1112.pdf 1. The new HARP is for loans originated on or after December 1, 2011. 2. The new HARP program has been extended through December 31, 2013 3. The original mortgage must have been sold to Fannie or Freddie prior to April 1, 2009. 4. It appears they are looking for scores at 620 and higher. 5. Max debt ratio to be 45%. 6.You must qualify using current income and asset information. 7. Both Fannie and Freddie appear to have set a date of March 2012 to have their Automated Underwriting Systems updated. Most likely the conduits (Banks/Originators) will not buy any loans that have been manually underwritten. This means I do not believe this program will take off until March of 2012. I will send an updated summary once the banks come out with their individual guidelines. 8. The new guidelines are permitting one 30-day delinquency within the previous 12 months on the mortgage being refinanced provided the Delinquency was not within the previous six months. 9. There are no LTV restrictions for fixed-rate mortgages with terms up to 30 years, including those with terms of 15 years. 10. Fixed-rate loans with terms over 30 up to 40 years, LTV is limited to 105%. Likewise, a 105% LTV cap has been placed on adjustable-rate mortgages (ARMs) with initial fixed periods of five years or more and terms up to 40 years. 11. Any borrower with an LTV ratio below 80% is not eligible for HARP.

12. The GSEs provided specifics on which liabilities would be lifted and noted that the rep and warranty adjustment is one of the most important components of the new program in order to create competition. 13. The lender will not be responsible for any of the representations and warranties associated with the original loan. As long as the new loan has no fraud associated with it, for the most part the new lender is off the hook as far as buy backs are concerned. This is a major point and will cause additional refinances. 14. The lender is not required to make any representation or warranty as to value, marketability, or condition of the subject property unless they obtain a new appraisal. Which if you think about it means that the lender would rather NOT order an appraisal. They will likely order one in the event they believe that the subject property may have challenges that are not being fully disclosed. 15. They are removing the requirement that the occupancy of the Mortgage being refinanced and the occupancy of the Relief Refinance Mortgage be the same 16. The GSEs are also removing the requirement that the borrower (on the new loan) meet the standard waiting period following a bankruptcy or foreclosure. The requirement that the original loan must have met the bankruptcy and foreclosure policies in effect at the time the loan was originated is also being removed. **I hope this information helps you. For what its worth, the experts are claiming these new guidelines will assist another 900,000 plus borrowers refinance. I hope you are one of them and that you will also be able to reduce your mortgage term. It's our intent to keep you up to date with the newest real estate and lending programs, trends and news. If after reading this you have more questions please don't hesitate to reach out to us for help. All of my contact information can be found below and feel free to forward this link to someone you think could benefit.

Dustin Wise "The Wise Team" Keller Williams Realty

714.698.WISE Direct 949.417.0200 Fax Dustin@TheWiseTeamOC.com www.Facebook.com/TheWiseTeam License # 01520106

Written and used with permission by Chris Sorensen