Yes 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
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