Special offer

Who said you Can't get >100% Refinancing without the Ability to Re-Pay, Not So Fast!!!!

By
Real Estate Agent with Top Agents Atlanta Metro

Photo8 Money HousesYes You Can get your Underwater Home refinanced no matter how far it is underwater (almost) and you no longer need to prove your ability to repay!!!  It is all about being in the right place at the right time in our current social economic climate.  As a Christmas Gift to the Nation, the folks in Washington at Fannie and Freddie have decided to give everyone almost everyone refinancing that no longer requires the ability to repay!!!

The recently announced HARP 2.0 program from Fannie Mae had the "reasonable Ability to Repay" stricken from the requirements now to get your home refinanced.  In it's latest in a series of moves Fannie Mae states that the "lender is no longer required to determine if the borrower has a reasonable ability to repay the mortgage based on a review of the information provided in the new loan application" Ability to repay has previously been determined by using DTI (debt-to-income ratio).  In the new HARP 2.0 guidelines, no DTI evaluation will be required if the payment does not increase by greater than 20%. A 45 DTI cap applies otherwise.

So if you or your friends or clients are upside down on your loan and are current on your payments, this may be the chance you have been waiting for to refinance your loan.  This should allow a number of people who could not originally qualify for HARP to now qualify without waiting for the Desktop Underwriting Program to change, so this would possibly be the time to make your move to refinance while the rates are really low.  A recap of HARP 2.0 is explained in a great article in DS news, among some of the key provisions are:

  • Elimination of the waiting period for foreclosure and bankruptcy that prevented some from qualifying
  • No LTV (Loan to Value) ratios for fixed rate mortgages with terms up to 30 years qualifying those who are severely underwater on their values
  • Loan must have been sold to FNMA or Freddie prior to April 1, 2009
  • Borrowers must not have been behind on their payments at all during the most recent 6 months and had no more than one 30 day delinquency in the past year.

The new Harp program has been extended through December 31, 2013.  You can accomplish the refinance with any Lender that is participating in the HARP 2.0 program, you do not have to use your current lender.

HARP 2.0 guidelines can be found here https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/sel1112.pdf

 

Photos courtesy of photo8.com

Comments (8)

Mark Geis
Coldwell Banker, Mulleady, Inc. Realtors - Eagle River, WI

Wow...   Two edged sword here... bail out the homes that people can't afford, yet keeping families in them.

Hmmmm...    

 

 

 

Dec 25, 2011 01:19 PM
Ron Marshall
Marshall Enterprises - Saint Michael, MN
Birdhouse Builder Extraordinaire

Who says Christmas comes but once a year....that would be fantastic news for some of the people I know.  Thanks.

Dec 25, 2011 01:20 PM
Mary Macy
Top Agents Atlanta Metro - Roswell, GA
Top Agents Atlanta Metro

Mark - At least this may keep some underwater homeowners from walking since they owe the money anyway, getting their rates down if they are current seems like a good thing to do

Ron - hope it helps some current deserving souls who have been responsible and are making their payments.

Dec 25, 2011 01:22 PM
Jim Frimmer
HomeSmart Realty West - San Diego, CA
Realtor & CDPE, Mission Valley specialist

Hope you had a great Christmas day today. Good luck in making it through the next seven days and getting into the new year!

Dec 25, 2011 02:05 PM
Ava Anderson
A-Z Atlanta Realty - Snellville, GA
Selling Atlanta from A-Z!

Great info thanks for sharing...Hope you had a wonderful Christmas with your family.

Dec 25, 2011 02:46 PM
Carmela Jacobs
Carmela Realty - Westlake Village, CA
Ventura Co., Los Angeles Co., CA, & Global Realtor

Mary,

DSnews is a great resource thanks for posting this update.  Merry Christmas.

Dec 25, 2011 03:26 PM
Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA
AL,AR,CA,CO,FL,GA,IN,MI,MS,NC,SC,TN,TX,VA

The ability to repay provision is not as bad as it may sound.  It will mainly help those who have experienced a drop in the their income in the last few years but are still managing to pay all of their bills on-time. 

Keep in mind that lenders and MI companies will always have overlays to agency guidelines that are more restrictive.  It remains to be seen what overlays will be required by the Secondary Market in regards to HARP 2.0.  The MI companies have just began to release their new guidelines. A lender's reps and warrants with the agencies greatly impact what it will and will not do. 

Dec 26, 2011 08:28 AM
Mary Macy
Top Agents Atlanta Metro - Roswell, GA
Top Agents Atlanta Metro

Jim - Thanks, it is a busy time

Ava - Thanks, same to you, glad the holidays are about over, I always get upside down on dates while they are here

Carmela - Thanks, I love DS News

Rodney - Thanks for your comments, It will probably be a big help to a lot of souls who need to get a lower payment.

Dec 26, 2011 03:11 PM