In early November, we learned about what sounded like a wonderful new refinance program available for responsible borrowers who are underwater (or upside down) on their mortgage loans.
This program, tagged HARP 2.0, was slated to have official guidelines on November 15, 2011. You may recall that as part of this program, the prospective borrower would need to have a mortgage loan currently with either Fannie Mae or Freddie Mac as the investor. Also, the mortgage loan amount would need to be under the conforming loan limits, and the borrower would have to be current on the mortgage and have been current for eleven out of the last 12 payments.
On November 15, 2011, lenders were told that homeowners could start applying for the program on December 1, 2011. However, don’t assume that these refis will close anytime soon.
According to Annamaria Androitis at SmartMoney:
Lenders who underwrite mortgages manually can start processing refinancing applications this month, say spokespeople from Fannie Mae and Freddie Mac. But those who depend on an automated software system to underwrite mortgages must wait until updates are made, says Brad German, a Freddie Mac Spokesman. (Many lenders rely on the automated system.) Those lenders won’t be able to start processing applications and delivering loans until at least early February for Freddie Mac-backed mortgages and until March for Fannie Mae-backed mortgages.
So, while the program sounds like it might be a good opportunity for many, tell your clients who were considering this program to avoid spending all the money they thought they might save. It sounds like those that do qualify for the HARP 2.0 program, may not see their property refinanced until some time in mid-spring of next year. For others who do not qualify, this may be another impetus for distressed borrowers to consider one alternative: the short sale transaction.
Short Sale Expeditor
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