HARP refinance with debt-to-income of 69% (foreclosures, Credit Bureau, loan, bank)

[lenora]

Originally Posted by jenny1951

I used this tool once before, with the same results:

Based on the information you provided your mortgage may not pass a HAMP NPV evaluation and you may not be eligible for a HAMP modification. Be sure to save a copy of the information below and share it with your mortgage servicer to discuss options available to you.

Ah, but you probably did not gross up your SSDI 125%. Nevertheless, one unknown is the formula that is used to determine whether it would benefit the investor to go forward with the foreclosure. I know that factors in the formula include where the home is located, time it would take to foreclose, amount the foreclosed home is likely to sell for after a foreclosure (stigma related to foreclosure) and in some cases, your credit score. Those factors are written into the NPV test. (Obviously, I like to research stuff. )

Right now, I am holding tight as long as I can. It's tempting to do a strategic default, but as yet the Mortgage Debt Relief Act has not been extended beyond 12/2012. I will see if that is extended before I make a decision to stop paying.

I need to get my application in pronto. If the MDRA is not extended, trial payments must be in effect before 12/31/2012 and given various deadlines under Fannie Mae, the application would need to be received by my lender by September 30th. This is my impetus. It may be my last chance to obtain a reasonable mortgage rate. In terms of taxes and forgiven debt (Fannie Mae does not pursue deficiencies unless there is clear fraud) the nonMDRA IRS regulations allow for the nontaxation of forgiven debt if the debtor is insolvent (more debt than assets) or declares bankruptcy. No problem for me (or you, for that matter.)

Here's hoping all works out for both of us, regardless of our respective decisions. I'm figuring either way, we will both keep on chugging along!

[jenny1951]

Originally Posted by lenora

I need to get my application in pronto. If the MDRA is not extended, trial payments must be in effect before 12/31/2012 and given various deadlines under Fannie Mae, the application would need to be received by my lender by September 30th. This is my impetus. It may be my last chance to obtain a reasonable mortgage rate. In terms of taxes and forgiven debt (Fannie Mae does not pursue deficiencies unless there is clear fraud) the nonMDRA IRS regulations allow for the nontaxation of forgiven debt if the debtor is insolvent (more debt than assets) or declares bankruptcy. No problem for me (or you, for that matter.)

Here's hoping all works out for both of us, regardless of our respective decisions. I'm figuring either way, we will both keep on chugging along!

Yeah there are many factors in that NPV, mostly what is to the lender's best advantage. I did forget to gross up my SS....duh! I have a friend pursuing a loan mod and she is dealing directly with Fannie Mae and not the lender. I called to check on that a few months ago and Fannie Mae said they would not accept my application until I was more than 30 days late. But after dealing with my lender when I first looked at the loan mod, if I had to go that route, I would try Fannie Mae first...at least you can get them on the phone.

Let's keep each other updated on our progress (or lack thereof!)

[5thgenSF]

Originally Posted by jenny1951

Well I may have been wrong. I just got a call from the bank that I do not have to sign the appraisal form, since HARP does not require one. Nor do I need to pay any fee to lock in the rate, and the problem with no GFE was I clicked the wrong button on the electronic documents page. So we'll see how this goes. I'll let you know if it is successful or not. They did gross up my SS, as Lenora mentioned, and also the DTI is based on the new loan, so I was wrong there.

i only know a little about hamp and nothing about harp. i haven't heard of closing costs for this before. is that normal?

[jenny1951]

Originally Posted by 5thgenSF

i only know a little about hamp and nothing about harp. i haven't heard of closing costs for this before. is that normal?

Yes, HARP just lets you refinance when you are underwater and have no equity. You still need to qualify as usual (income, credit score, no late payments, etc) and the closing costs are typical (3% of the loan). The only low-fee refis I have seen are for larger loans. I would be lucky to get this.

[5thgenSF]

Originally Posted by jenny1951

Yes, HARP just lets you refinance when you are underwater and have no equity. You still need to qualify as usual (income, credit score, no late payments, etc) and the closing costs are typical (3% of the loan). The only low-fee refis I have seen are for larger loans. I would be lucky to get this.

interesting, thanks. i wonder why the .gov guy kept talking about hamp to me instead of harp. maybe because hamp wouldn't have refi fees, i don't know.

[jenny1951]

Originally Posted by 5thgenSF

interesting, thanks. i wonder why the .gov guy kept talking about hamp to me instead of harp. maybe because hamp wouldn't have refi fees, i don't know.

HAMP is very different, and can have some very negative consequences. HARP just allows borrowers who are current on their loans to refinance even if they have no equity. Have you read the information on the government website? It explains the differences in these two programs:


Making Home Affordable

[5thgenSF]

Originally Posted by jenny1951

HAMP is very different, and can have some very negative consequences. HARP just allows borrowers who are current on their loans to refinance even if they have no equity. Have you read the information on the government website? It explains the differences in these two programs:


Making Home Affordable

i'm current as of today. tomorrow is another story! mine isn't freddie mac or fanny mae (where did they get these funny names?!) i think that's why. thanks.

[jenny1951]

Originally Posted by 5thgenSF

i'm current as of today. tomorrow is another story! mine isn't freddie mac or fanny mae (where did they get these funny names?!) i think that's why. thanks.

Yes, if it's not a Fannie Mae or Freddie Mac loan (I too wonder about those names!) you are not eligible for any of those programs. But you can still try and refinance at a lower rate, unless you are underwater.

[5thgenSF]

yep, very underwater.

[jenny1951]

Originally Posted by 5thgenSF

yep, very underwater.

I read last week where Congress are considering a HARP 3.0 for loans that are NOT Fannie or Freddie, but it's anyone's guess what the outcome will be. They are also discussing how to lower closing costs to make more people eligible, but I am afraid to wait.