Profile picture for cwayde08

HARP 2.0 Appraisal

Hello,

 My 1st loan is owned by Freddie Mac and I know that the 2nd mortgage cannot be touched.

I called my lender and they said an appraisal is required but according to Making Home Affordable, there's no requirements for an appraisal. Why would they require an appraisal if the LTV has been eliminated?

 I was quoted with a Good Faith Estimate of 4.625%. I know the rates have been coming down the past week to 3.90% or so. I have an excellent credit score of 792. How come I did not get a much lower interest rate? What other stuff is being factored? Debt? Income?

Can I also choose between a 15 year and 30 year financing via HARP 2.0?

 

Appreciate all the help and feedback.

 

Thank you!

 
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January 23 2012 - US
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Replies (22)

Is your loan-to-value percentage on the first mortgage above or below 80% of current home value?  If it's below 80%, that's probably why your lender is asking for an appraisal  (HARP is designed for borrowers with 80% to 125% loan-to-value on their 1st mortgage).  If it's above 80%, you shouldn't need an appraisal unless the servicer of your 2nd mortgage requires one in order for them to agree to subordinate their position behind the refinance.  The 3.90 rate you are seeing is for standard Freddie Mac loans with 60% or under loan-to-value ratios.  HARP is a different program entirely. 

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January 23 2012
The over 125% version currently does require an appraisal unless the lender feels the current value is equal to the value that was used when the existing loan was obtained.

The 2.0 version does offer reduced pricing adjustments and should be pricing very similarly to "market rates".    Right now, over 125% is only available with existing servicers.   It wouldn't surprise me if they are taking advantage of this by building tons of profit into the transaction.

If you are unhappy with your offer, you might find better options available in March when the over 125 becomes availble to new servicers.  

If you are currently <125, you can apply at a participating Open Access lender and get another estimate.   There are often wide variances in available pricing for the 105-125% version of the program so good chance you can do better.

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January 23 2012
been doing plenty of HARP 2.0's this month; rates are running 3.875% to 4.250% for the most part. At 4.625% the lender credit is wiping out your closing costs completely.

Most extreme HARP 2.0 I've turned in this month so far.....488 score and 210% LTV.
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January 23 2012
Profile picture for cwayde08
Thank you all for your feedback and comments. I'm still a little lost with the LTV system. I purchased the house at $195 and have 2 mortgages. The first mortgage has a balance of $140k left and 2nd mortgage is about $24k left. Is it better just to wait in March when it is fully implemented from other lenders? I can't believe that I get a 4.625 with an excellent credit score of 792. Are they adding more stuff for the closing cost which is around $4500 and will be added towards the loan which is significant amount.

Thanks!
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January 23 2012
the score has nothing to do with it (v2.0); at 4.625% they're probably paying all the closing costs; block A of your GFE should be a large negative number.
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January 23 2012
Profile picture for cwayde08
4.6255 and a closing cost of nearly $4500.
Better to wait in March and look for a lower rate from other lenders?

Thakns!

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January 24 2012
The current value is still the missing item here to determine your existing LTV.   Unless the current value is less than 115,000, you shouldn't have to wait until March to be able to get other estimates through participating Open Access lenders.
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January 24 2012
Profile picture for DanceDoctor
Sorry for sounding stupid - but what does HARP mean?  Is it available to anyone?
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January 24 2012
The program is so confusing to me.  I have a loan that the credit report, and the Fannie Mae website says it is Fannie Mae, but the DU report says it was not underwritten by Fannie Mae guidelines therefore, the loan is not eligible for the DU Refi program.  Why is this?
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January 24 2012
Profile picture for TElliott1981
i am in the middle of refinancing our condo with our original lender with the Harp 2.0 program. I have fannie mae but we are getting a 4.5 interest rate and started process Dec 2nd-ish and we are closing this thursday. I never got an appraisal but they had what they figured it would appraise at on the report. Our closing costs are being rolled into our balance. Our credit 680ish area
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January 24 2012

Steffnie - The credit report is not a great indicator, for example several Pick a Pay loans serviced by Wells say Fannie Mae on credit and they are not Fannie Mae.   The Fannie lookup site typically IS a good indicator, if you are getting a match there and not in DU, make sure you have the property address exact when you run it, get the borrowers mortgage statement and use that address exactly.    If it still gives no match on the findings, you can call Fannie and try to have them confirm if they do indeed own the loan, but it would be impossible to do a DU Refi + without the findings agreeing.

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January 24 2012
Thanks Justin, I know that the credit report isn't a good indicator, but that doesn't clear up why the Fannie Mae website says yes your loan is owned by Fannie Mae and the DU says your loan is not eligible.
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January 24 2012
Profile picture for Spartan14
I am experiencing the same as the original posted with the HARP 2 guidelines.  My LTV is over 125%, but I am being told I have to get an appraisal.  I do have a second loan and that is why they are saying I need to get the appraisal even though it isn't needed for HARP.

Wondering if I should wait until March too?

I have a friend who has the same set up as me and her second loan is with the same bank as mine and she didn't have to get an appraisal.

We both were quoted a rate of 4.5% on Monday (includes all closing costs etc.)
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January 25 2012
Profile picture for cwayde08
Spartan14,

I think I'm going to wait until March and more lenders will be able to accommodate other customers. I have Citi and was quoted for 4.625 and closing cost was high at $4500. What was your closing cost? The appraisal was about $500. They were going to roll it over to the loan. I think if I wait in a couple of months, I will shop around with other lenders that implement HARP 2.0 and get a lower rate. I don't understand why Citi quoted me for 4.625% and I have an excellent score of 792. Hopefully in March, another lender will give me a lower and better rate and dump Citi all together. I talked to Freddie Mac and they said that each lender can implement their own rules and don't have to follow the guidelines set by Freddie. For example, doing an appraisal which is totally BS since there is no value, why? Hopefully, March will be better for us. Let me know how it goes on your end...

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January 25 2012
Profile picture for REI_Joe
I was quoted a couple of days ago from BoA 4.625% with 145% loan to value. I have a second with a different lender only refi the first. My closing cost would be $4000 including interest and escrow reserves for taxes and insurance. I have credit score of 790.  I was hoping for a better rate and was hoping to shop around but called other banks and they are not servicing other loans till March.  I was wondering if I should wait it or will interest rates keep going up?  I also remember they mentioning a closing cost credit but that doesn't seem to be the case, did that not make it in the final draft of HARP 2.0?
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January 25 2012
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March 21 2012
Profile picture for J from PA
HARP 2.0

Just wanted to give my experience with Wells Fargo.  Wife and I just sent the close at home pkg. back to Wells and I got an automated phone call today saying they received it and will let us know when it closes.  

I am a current Wells Customer.  I originally had a 30 yr at 5.375% that kicked in April '05.  I will be closing on a 20 yr @ 4.0% starting May 1st of this year.  I will skip April's payment.  My note will increase slightly to include the interest from the skipped payment and the $52 recording fee for the original loan satisfaction.  It was truly a no cost refinance (other than $10 for notary fees for me at AAA and the small increase in the note, but I am skipping a payment).

Escrow will just roll over from my old loan.

My LTV was 77% and no appraisal was required.  The automated appraisal included in the documentation showed a modest 2.5% increase in my home value from '05 (which is low based on recent neighborhood sales).  

My FICO is 791 and my wife's is 816.
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March 21 2012
" My LTV was 77% and no appraisal was required."
----
They didn't do you any favors by streamlining this. You could have gone the conventional refi method and most likely obtained a much better rate. 
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March 21 2012
Hello Everyone,

We appreciate all of your posts.  We have removed some posts from this thread because they were off topic.  Please refer to our Good Neighbor Policy for details. 

Thank you for understanding.

Best Regards,
Candace
Zillow Customer Support
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March 21 2012
Profile picture for J from PA
Professor Brown,
I agree, I could have gone the traditional route and maybe gotten 3.5% or thereabouts, maybe a little less, but I would have had to get an appraisal and pay $2k-3k in closing costs.  Since we don't plan on living in this house beyond 3 years or so, it made sense to me to do the no cost refinance. Yeah, they are using the spread premium to pay their costs and make some $ but I am still reducing my payment, reducing my rate, reducing my term and I am not paying any real money out of pocket.  Since I am skipping a months payment, I will increase my first payment by the amount of interest and principal I skipped to get my payoff back to less than my original note.  

The beauty is, I can turn around and do a traditional refi. again if I want once this closes.  If you can get me down to 3% w/o paying any $ out of pocket or rolling the costs into the new loan, I'm all ears and please email me the specifics.  

Please point out my errors to me.  I am always willing to learn and I fully admit, mortgage brokering, etc. is definitely not a strong suit of mine.  
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March 23 2012
If you're happy, I'm happy.
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March 23 2012
Profile picture for J from PA
I think I can almost cut the sarcasm with a knife!  :-)  

I know some brokers can do a real "no cost" refi. but the rates are jacked up a little for YSP (I think that's what it is) and their fees get paid for out of that with some left over for profit.  Is the rate for that really a big difference right now (or would it have been at the beginning of the month when I applied)?  

I am truly interested in case we do change our minds and decide to stay in the house longer and want to refi. later on.  

One thing that does seem strange to me, I thought your LTV had to be over 80% to be eligible for HARP 2.0 but I my paperwork did say this was a HARP refinance and I would be ineligible for it in the future.  

Sorry if I came off in a bad way previously.  That wasn't my intent.
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March 23 2012
 
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