9 replies to this topic

[cv91915]

I owe about 25% more on my house than what it's worth and have an ARM that has mostly adjusted in my favor (payments have gone down 25% since it started adjusting in 2010). My income is well above any guidelines I've been able to find in terms of qualifying for a HARP refi.

Has anyone in a similar situation been successful with getting a HARP refi or other mortgage modification done? At minimum I'd like to lock in the interest rate, but it would be even better if I could shave some $ off my principal. I wouldn't feel so entitled if I didn't bleed XX,XXX in taxes every year...

I certainly wouldn't trade my situation for a hardship, but I do want to explore options for moving to a bigger house, but I'm kinda stuck in this one until I can figure something out. I'd rather not do a short-sale...

[Brian B The Loan Professor]

I owe about 25% more on my house than what it's worth and have an ARM that has mostly adjusted in my favor (payments have gone down 25% since it started adjusting in 2010). My income is well above any guidelines I've been able to find in terms of qualifying for a HARP refi.

Has anyone in a similar situation been successful with getting a HARP refi or other mortgage modification done? At minimum I'd like to lock in the interest rate, but it would be even better if I could shave some $ off my principal. I wouldn't feel so entitled if I didn't bleed XX,XXX in taxes every year...

I certainly wouldn't trade my situation for a hardship, but I do want to explore options for moving to a bigger house, but I'm kinda stuck in this one until I can figure something out. I'd rather not do a short-sale...

I am not an expert on mods but trying to get one done for myself now - like you I would like a lower rate with few options available - my understanding is if the mortgage is higher than 31% of your income then your odds go way up for a mod -
if you make too much then you should look at the Harp 2 loan (thats where I am going to try next if Mod doesnt work out)
It allows you to refi when upside down if the loan is owned by Freddie Mac or Fannie Mae.
B

[cv91915]

Thanks, Brian. My mortgage payment is about 12.5% of my gross monthly income, hence the difficulties finding palatable options.

Are you doing your own mod with your current lender or do you have someone helping you? I'm not sure I have the tenacity (and certainly not the upper hand, information-wise) to go it alone, and I'm more than willing to pay someone local/reputable who knows what they're doing to usher it through for me, starting with the mod and going into a HARP refi if necessary.

I did go through "counseling" with a local HUD-approved provider to evaluate my options and they didn't come up with anything short of begging my servicer for a modification. My only hardship: an ARM I can't refi out of because I'm underwater, and some nebulous fear that the rates will go up in the future. Not sure if that's enough...

[Brian B The Loan Professor]

I am fighting through it myself - with the collapse of the housing market my income went down so I am showing this and claiming hardship - I refuse to miss a payment and like having good credit - so if it doesnt work I will go to the Harp 2 which is possible because Fannie Owns my loan. If I could get a 4% rate I would save about $500 a month so it is well worth the effort - Good Luck
B

[cv91915]

Good luck to you too, Brian. Thanks for the input/info.

I am fighting through it myself - with the collapse of the housing market my income went down so I am showing this and claiming hardship - I refuse to miss a payment and like having good credit - so if it doesnt work I will go to the Harp 2 which is possible because Fannie Owns my loan. If I could get a 4% rate I would save about $500 a month so it is well worth the effort - Good Luck
B

[cinderella]

Thanks, Brian. My mortgage payment is about 12.5% of my gross monthly income, hence the difficulties finding palatable options.

Are you doing your own mod with your current lender or do you have someone helping you? I'm not sure I have the tenacity (and certainly not the upper hand, information-wise) to go it alone, and I'm more than willing to pay someone local/reputable who knows what they're doing to usher it through for me, starting with the mod and going into a HARP refi if necessary.

I did go through "counseling" with a local HUD-approved provider to evaluate my options and they didn't come up with anything short of begging my servicer for a modification. My only hardship: an ARM I can't refi out of because I'm underwater, and some nebulous fear that the rates will go up in the future. Not sure if that's enough...

Why don't you call up your servicer and ask about a HARP? They have the option of doing a manual underwrite and bypassing DU, which leads to random automated system recommendations. Where I work with we don't even calculate income on manual harps. Dti is not relevant for Harp, unless you have a payment increasing by 20%. But it is not HAMP - the loss mitigation side of MHA, where for most investors front-end dti is a qualifying factor.

Harp is unrelated to hardship, but it is under MHA. I did underwriting for every investor in loss mitigation/MHA, I would say a good % of applications have nothing to do with a financial inability to pay the mortgage, just a want to lower the interest rate and receive better terms. Current on the mortgage and a front end DTI at 12.5%, I wouldn't be able to deny the app. fast enough in loss mit. Besides, FNMA and FHLMC have very strict guidelines for current homeowners that have to be well documented, most will be denied unless they can produce a divorce decree/death certificate/SSI award letter for disability for the a borrower or co borrower that was contributing HH income. Even if a person decided to become delinquent to attempt to qualify, it would still be reviewed if it was a deliberate default by some investors and the front end dti is well beyond the threshold for FNMA/FHLMC HAMP.

Harps are meant for the current homeowner, including those underwater. No hardship required! Very simple refi program with lenient guidelines pushed by the goverment under MHA. Going w/ your servicer gives the advantage of a manual u/w, while every servicer is different and will interpret guides uniquely, it is basically a stated income with no income calc based on a nominal verification of income for the manual underwrites.

Honestly, I love harps. Simple, no bs like in loss mit., very easy guidelines, and you won't be in the system for a year like you would even if you could qualify for HAMP. I bypass conventional underwrites in the queue everyday to do the Harps., there are just so easy.

[cv91915]

Cinderella, thanks! My servicer has a terrible reputation (horror stories all over the Internet) but I will make an appointment with my primary bank and see how they can help. Based on some further research since your post it looks like I don't have to go back to my servicer, but rather I can do a little shopping for new lenders, provided they are Fannie/Freddie approved.

I'm really stoked that I have a direction. Thank you so much!!

[cinderella]

Cinderella, thanks! My servicer has a terrible reputation (horror stories all over the Internet) but I will make an appointment with my primary bank and see how they can help. Based on some further research since your post it looks like I don't have to go back to my servicer, but rather I can do a little shopping for new lenders, provided they are Fannie/Freddie approved.

I'm really stoked that I have a direction. Thank you so much!!

Harp is an excellent program under MHA. It really is intended for underwater homeowners w/o hardship that are current. Keep in mind, that your current servicer has the ability to a manual underwrite and bypass the automated system a new lender will have to use for underwriting, the manual giving them more leeway and streamlining the process further. If you don't have any luck w/ an outside lender, might want to review w/ your current servicer.

Good luck!

[cv91915]

You are becoming my HARP sherpa, Cinderella.

I just talked with my current servicer. They will not do a HARP refi over 125% LTV (which may or may not be okay in my case... depends heavily on the "V" part ).

In addition, if I submit an application today they wouldn't review it for about 90 days. I will likely put in app with them and shop elsewhere while that clock is ticking. They went so far as to suggest that I contact Quicken Loans for faster response. Clearly this isn't much of a money maker for my current servicer or the priority would be a lot higher.

We'll see how this goes...

[cinderella]

You are becoming my HARP sherpa, Cinderella.

I just talked with my current servicer. They will not do a HARP refi over 125% LTV (which may or may not be okay in my case... depends heavily on the "V" part ).

In addition, if I submit an application today they wouldn't review it for about 90 days. I will likely put in app with them and shop elsewhere while that clock is ticking. They went so far as to suggest that I contact Quicken Loans for faster response. Clearly this isn't much of a money maker for my current servicer or the priority would be a lot higher.

We'll see how this goes...

MHA programs are backed up. Servicers can't keep up, whether it is a hardship request for a mod or a Harp. A refi under MHA is not like it would be under a regular FNMA/FHLMC streamlined refi. It is under MHA with easier guidelines that allow a current borrower that would otherwise be denied a refi under standard refis because of high LTV's. Yes, it may not be as fast as if a brokerage was doing it, but the servicers seem to have a mini monopoly on the harps and have the advantage. For what it is worth, I don't think interest rates will go up this year, they usually don't in an election year.

I've heard of people being denied for high ltv's under harp, which might be the servicer's own internal policy to deny at above the 125% ltv. Fnma allows an uncapped ltv on harps, albeit the 125% is a different product w/ a slighly higher interest rate than harps under 125%. The servicer I underwrite for allows for a 1000% ltv by our internal program guidelines, all saleable loans to fnma.

The guidelines for harp, as far as underwriting, are written in favor of the servicer, mostly banks, over a brokerage. The servicer has much more leeway in how they can underwrite by fnma and fhlmc guidance. Which is why I recommend, even if your servicer is a PITA to deal with, they might be the best option for a harp because of leniency given to servicers in the harp guidelines for underwriting that a brokerage can't beat.

If your servicer is a bank and there is a branch nearby, might want to speak with a loan officer, they should be able to know your servicers guidelines. Maybe the person you spoke with was a loan officer and knows the guidelines for your servicer very well, or maybe last month they were in the collection department of the bank and now moved over to customer service to answer the gazillion phone calls servicers receive a day under MHA requests and are just winging it with limited knowledge. It happens all the time..... I'd trust the knowledge from a face to face w/ a LO at the branch of your servicer/bank, if available.

Other than harp, you have one less option, and it will be an ugly-long time consuming process, will require you to be delinquent, which would rule out harp if you try that route at a later date. Most people don't know about this, then again most people haven't worked 60 hours a week in loss mitigation. If you go this route, you are on your own. It is the alt./standard mod. under fnma, it can reduce ltv to 115%, but your front end depending on how income is calculated may not allow it, it will go to 10% front end dti - modified. Keep in mind, this is only intended for delinquent homeowners. Yes, it states current will be considered, but guidance is current with a documented death/dis./divorce. Term extended, ltv to 115%, and interest set to fhlmc weekly rate - fixed.

https://www.efanniem...pfmstndmods.pdf