New HARP Guidelines Released

Last week the new Home Affordable Refinance Program (HARP) guidelines were released by the Federal Housing Finance Agency. The updated program is meant to give "underwater homeowners" an opportunity to refinance at today's low mortgage rates. After reviewing the details, CU Companies has determined it will participate in the program.
We will begin taking HARP applications on December 1, 2011. Because Fannie Mae's Desktop Underwriter will not be updated until March 2012 to accomodate the changes, we will manually underwrite applications for 30-year fixed loans. This means the borrower can be approved but will not be able to lock into an interest rate until February 2012. It also means more documentation will be necessary. (Borrowers interested in refinancing into a 15-year fixed loan via HARP will have to wait until June 2012.)
There were several individuals that contacted CU Companies in November when the anticipation of the new HARP guidelines was announced. We will notify them of the details and also provide a manual application and the checklist of documents needed.
The main aspects of the updated program are bulleted below. A key point, however, is that the mortgage loan must have been sold to Fannie Mae (or Freddie Mac) on or before May 31, 2009. If you portfolio your mortgage loans, you will obviously have individuals that are automatically ineligible for this program. The web sites to assist consumers in determining who owns their mortgage loan are www.fanniemae.com/loanlookup and www.freddiemac.com/mymortgage.
The complete Guide Announcement can be found at www.efanniemae.com.

HARP program highlights

• There is no maximum LTV on fixed-rate mortgages with terms up to 30 years.
• The maximum LTV for fixed-rate loans with terms greater than 30 years and up to 40 years is 105 percent.
• The maximum LTV for ARMs with initial fixed periods greater than or equal to five years and terms up to 40 years (as permitted by the ARM plan) is 105 percent.
• HARP is extended through December 2013.
• Applicants cannot have a delinquency on their first mortgage within the last six months, and only one 30-day delinquency in the last 7-12 months.
• There is no waiting period to refinance if a member has a previous Bankruptcy or Foreclosure.
• An additional requirement is that the borrower must receive a benefit in the form of either a reduced monthly mortgage payment (principal and interest) or a more stable product, such as a move to a fixed-rate mortgage from an ARM.