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December 22nd, 2011

No. 7: ‘HARP 2.0: Your 5 steps to approval’

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ApprovedNumber seven on our Top 10 most popular articles of 2011 is the refinance article, “HARP 2.0: Your 5 steps to approval.”

Publish date: November 09, 2011
Written by: Dan Green

Excerpt:

If you’re among the more than 7 million who are expected to qualify under the expanded HARP 2.0 guidelines, there are several preparatory steps you need to take to ensure your application is reviewed first.

Since HARP mortgages are backed by Fannie Mae and Freddie Mac, the underwriting process will resemble that of any other conventional mortgage. There will be loan disclosures to sign and supporting financial documentation to remit.

To ensure your HARP application lands on the top of the stack, you’ll need to follow these 5 preparatory steps:

1. Ensure Fannie or Freddie backs your mortgage

Since day one, only those with mortgages owned or guaranteed by Fannie or Freddie could qualify. Fannie and Freddie each have a loan lookup tool which allows homeowners to search for their loan.

To check if your mortgage is backed by Fannie Mae, visit http://www.fanniemae.com/loanlookup/. If your mortgage is not found, try Freddie Mac’s loan lookup at https://ww3.freddiemac.com/corporate/.

Mortgages not listed on either website are not backed by Fannie or Freddie and, therefore, are not HARP-eligible.

2. Determine if your mortgage is old enough

Only those whose mortgages were securitized prior to June 1, 2009 can apply for HARP. In general, this means that your mortgage must have started in mid-May 2009 or earlier. You can find your mortgage start date by looking at your closing paperwork. In the upper-right-hand corner of your settlement is your “funding date”–that’s the date you’re looking for.

Note: Since it can take up to 60 days to securitize a Fannie or Freddie loan, even if your start date is close to June 1, 2009, you still may be ineligible.

3. Does your current mortgage have LPMI?

HARP 2.0 is designed to help homeowners with or without private mortgage insurance (PMI), but the government’s revisions specifically excludes homeowners that chose lender-paid mortgage insurance (LPMI).

LPMI is mortgage insurance that’s built into your rate. If your mortgage statement itemized your monthly PMI, you have borrower-paid mortgage insurance and are thus eligible. All other mortgage insurance types are ineligible–including single-premium insurance.

4. You must be current

HARP 2.0 requires that all homeowners have made their last six mortgage payments on time, with a maximum of one 30-day late payment in the past year. This information is verified against your credit report, so be sure to review your credit reports prior to submitting your application.

5. Find and organize your supporting paperwork

Since HARP mortgages are underwritten like every other type of mortgage, you will be required to provide bank statements, a drivers license, homeowners insurance information, pay stubs and W-2s. If you’re self-employed, you’ll have to provide a few years of tax returns to verify your income.

Your speed in which you return these items to your lender can dictate your mortgage rate. If you plan on applying for HARP 2.0, gather all these items in advance. The less you leave to the last minute, the smoother your application will go.

Again, there will be a crush of new applications when HARP 2.0 is open to the public. If you’re going to apply, you must follow these tips to be one of the first approved and one of the fastest to close.

Read more from our ‘top 10 of 2011’ list:

No. 10: Why is it so hard to be approved for a HARP refinance?

No. 9: Crazy to refi into an ARM? Not at all

No. 8: 3 hot home renovations

For more on HARP, read:

HARP: What’s it about, why it failed and why it’s changing

Breaking down the new HARP program

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5 Responses to “No. 7: ‘HARP 2.0: Your 5 steps to approval’”

  1. Chippy55 Says: January 5th, 2012 at 1:25 pm

    This is another bailout and Hussein Obama is going to lie and say, “See, the big bad banks were using predatory lending practices, and I’m here to save you”. And guess what’s next folks? Student loan bailouts, don’t think he won’t do that in an election year, except this one will wipe out ALL student loans, especially the knucklehead at one of the Occupy sights. He whined into the cameras, “I have a $100,000 student loan and haven’t been able to find a job for 2 years, so I can’t repay the loan and interest keeps adding up, boo hoo”.

  2. Sam Says: March 20th, 2012 at 5:21 pm

    I wasn’t around for the initial HARP refi, so I am not familiar with the original guidelines. My question is does the borrowers credit score factor in to the approval at all?

  3. Scott Says: March 23rd, 2012 at 12:56 pm

    I have the impression that despite our very high interest rate, that Harp 2 .0
    will not help us as my wife and I are self employed in business together and a distinction is no longer made between total income / profits and taxable income.
    We have many tax shelters and could easily afford a more reasonable interest rate. We are with Seterus which makes it appear that we are even more stuck.
    Ironic that low income tax bills and 19 years in a rock solid business is actually what causes us to be viewed as too risky after keeping current with a high interest rate during the worst years of the economic problems. Any hope for us?
    …and no we cannot afford to take our deductions when our high interest rate is squeezing us so hard…..

  4. Scott Says: March 23rd, 2012 at 12:57 pm

    Oops. Can not afford to NOT take our deductions

  5. americanreleif fan Says: March 24th, 2012 at 8:39 pm

    If anybody needs help with a harp loan you should contact the people at American Relief I was told I could not do my harp loan but they got it done for me with no appraisal and no closing cost saved me over 700 dollars a month I was blown away I went from a 7 to 4 percent rate I love you guys if anybody need to reach them u can contact them http://www.AmericanRelief.com or just call them 877) 925-9119

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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