New "HARP" Program Available to Re-Finance Valley Home Owners. (Phoenix: real estate, insurance)

[MN-Born-n-Raised]

When I was in Phoenix last week, a friend of mine got a call out of the blue from a Chase loan officer. He owns a few properties in the Valley but he cannot re-finance because his income is way down (he won't quality) and he is upside down. She said that wasn't a concern.

See Government Refinance Assistance The program is an expansion on the program called HAMP and it has been modified. There is a limited supply of $$'s so his current mortgage holder (Chase) called him to refinance because the banks are getting proactive. He made an appointment and the paperwork is already complete in anticipation of the modifications. He didn't need to verify his income. In the end, he should drop from 6.25% to 4.15%. This all happened just last week.

I hope this can help some people in the Valley as the 125% loan to value ratio has also been lifted. Good luck!

[Zippyman]

Originally Posted by MN-Born-n-Raised

When I was in Phoenix last week, a friend of mine got a call out of the blue from a Chase loan officer. He owns a few properties in the Valley but he cannot re-finance because his income is way down (he won't quality) and he is upside down. She said that wasn't a concern.

See Government Refinance Assistance The program is an expansion on the program called HAMP and it has been modified. There is a limited supply of $$'s so his current mortgage holder (Chase) called him to refinance because the banks are getting proactive. He made an appointment and the paperwork is already complete in anticipation of the modifications. He didn't need to verify his income. In the end, he should drop from 6.25% to 4.15%. This all happened just last week.

I hope this can help some people in the Valley as the 125% loan to value ratio has also been lifted. Good luck!

For what it's worth, Chase isn't being "nice" - there are fees associated with those loans, (~1%), and your friend's monthly MIP (mortgage insurance premium) will likely double.

On a side note, my mortgage experience with Chase has been less-than-stellar. They really stink as a servicer. I'd go anywhere else if at all possible.

[Ponderosa]

The modified HARP details have not even been released and won't be until 11/15. The program is not expected to start until at least 12/1 and likely not until Jan 2012. The info from FHFA released so far is that there will be no limits to LTV ratios, appraisals by automated methods (Zillo like models) are OK, new title insurance is not required, banks have agreed to automatically subordinate seconds, PMI will transfer, and fees are reduced and may be eliminated if you shorten the term of the loan. There is no limit to how many loans could be made or money available. The idea is that up to 4 million could benefit, but they doubt that many will because of credit problems (scores). I haven't seen that they were relaxing income standards or credit factors, but your post suggests they might be doing that as well. The requirements are you must not have made any late payment in past six months or more than 1 in the last 12.

All this is only for Fannie and Freddie owned loans.

I am watching this closely as it will save me a good deal of money (I have two houses that will qualify) and make me feel a whole lot better about staying in my house, I think. As Zippy said, it won't be free, but at 2-3% interest differential it won't take long to break even.

[Captain Bill]

I'll wait to see more details on this.

[Ponderosa]

One more thing, the info released by FHFA says that under the new program, if you have PMI it will not increase and if you do not currently pay PMI, you will not have to when you refinance.

[CheyDee]

Someone on the mortgage forum suggested being very cautious, making sure the new loan does not have recourse.

[jimj]

There's got to be a catch. Nothing comes for free and no government program ever works as advertised.

[Ponderosa]

Originally Posted by CheyDee

Someone on the real estate forum suggested being very cautious, making sure the new loan does not have recourse.

As long as it is purchase money refi, then the law applies. But if you are like me and are re financing a cash out refinance, then it would be recourse, I suppose, since the original loan was too. It really doesn't matter though. From a practical point, no banks are pursuing judgments in AZ except in cases of fraud and a borrower with substantial assets even on seconds much less firsts.

[Ponderosa]

Originally Posted by jimj

There's got to be a catch. Nothing comes for free and no government program ever works as advertised.

The main catch is that you have to have a Fannie or Freddie loan. I heard that only about half of the loans are those type, but the ratio is higher in AZ. Also, the banks are getting their cut in fees and it is going to cost something, probably well over a thousand per loan. But the major "catches" in the original program have been addressed. We ll have to wait and see the details later this month to see if this is just more too-little, too-late like the rest of the programs have been or something than can really help out people in AZ, NV, FL, CA etc. Unlike the original HARP, the banks, FHFA, the govt, the PMI insurers, and the title people were all involved in working out this deal, so I am hopeful.

[Ponderosa]

Something to consider here too: In my case, I am barely upside down on my properties and I am very confident I will be in the black in a year or two or three, if I am not already (according to the appraisal models my values have gone up 10% since June and I am very close). But if someone is in the hole by 2 or 3 times the value of their property it is going to take a long, long time to get even. They may still be better off to take the strategic default route rather than re-fi.