Monday the Federal Housing Finance Agency (FHFA) released an announcement that outlined changes to the current Home Affordable Refinance Plan (HARP).
Highlights included:
- Lower loan level adjustments for some scenarios, geared towards borrowers who refinance intolower amortization periods.
- Allowing LTVs to 125% and above.
- Eliminating new appraisals where there is a reliable AVM estimate.
- Waiving certain representations and warranties that lenders commit to in making loans owned orguaranteed by the FNMAand FHLMC. (This was the primary reason most investors did not offer LTVs above 105% on the current HAMP programs.)
- Extending the end date for HARP until Dec. 31, 2013.
- Loans that were originally sold to FNMA or FHLMC before May 31, 2009 with an LTV of 80%or above. If your borrower is unsure who purchased their loan, below are the links for Fannie
Fannie Mae: http://www.fanniemae.com/loanlookup/
Freddie Mac: https://ww3.freddiemac.com/corporate/
- Borrowers must be current on their mortgage payments with no late payment in the last 6 months,and no more than one late payment over the past 12 months.
FHFA is the agency that regulates both Fannie Mae and Freddie Mac, but both Fannie and Freddie have not released any additional information on HARP Phase II. Per the news release, they will “issue guidance with operation details…by November 15”. Also remember that in addition to new guides, the agencies will have to update their automated underwriting machines, Desktop Underwriter and Loan Prospector. Delivery of these loans to the agencies is not expected to be available until the first quarter of 2011.
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