Progress Update on HARP 2.0


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As mentioned on a previous post, Refinance Your Underwater Home with HARP 2.0, I indicated that I would provide an update on my progress as well as what other underwater homeowners are experiencing now that the new guidelines have been updated.

My mortgage was previously owned by Bank of America for several years and just late last year my mortgage was sold to M&T Bank.  I had contacted M&T Bank early in March, just as HARP suggests to find out if they participate in the program.  I was told to call back mid-March which is when M&T Bank said they would have HARP system up and rolling.

On March 19th, I contacted M&T Bank to start the process in refinancing our underwater home.  M&T Bank’s customer service tells me that they are still waiting on Freddie Mac (that’s who guarantees our mortgage) to sign off on processing HARP loans.  I am told that this should be done by the end of April.  As I am speaking with M&T Bank’s customer service to discuss particulars, I’m getting the feeling that they are not too eager to do this type of refinance loan.

Although there are updated HARP guidelines and you, as a homeowner, may fit the criteria, this does not necessarily mean you will get your underwater home refinanced.  The banks have put their own additional guidelines.  As with M&T, I was told although the Loan-to-Value (LTV) has been lifted with HARP, they are not willing to take on the risk of over 125% LTV.  I’m confused about the risk factor since the updated HARP guidelines are supposed to limit the bank’s liability in case of loan default, which should encourage more banks to participate.

My options were to either wait until Freddie Mac signs off or shop for a new loan.  I have decided to wait until the end of April to contact M&T Bank only because staying with the same mortgage servicer is supposed to be better streamlined when it comes to re-qualifying and they already have our mortgage history. I’ll be keeping my fingers crossed that all will work out.

Many homeowners are having trouble getting their HARP application approved through the new automated system and are being denied.  My suggestion would be to ask your lender to manually underwrite the loan if you run into this problem.  Should you decide to shop for a new loan, be prepared that many lenders are keeping to the 125% LTV or less. There are some homeowners who are having success in refinancing their mortgage through HARP, so try not to get discouraged, you might just find a lender who won’t make you jump through hoops or charge you outrageous fees.

I’ll continue to keep you updated on progress as well as new developments including other mortgage programs that may be available to help underwater borrowers.

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