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High DTI and Refi...Any lender that can help me?

I just started my refi application with my current servicer for a HARP 2.0 and have locked my rate. Since they are doing a manual underwrite it will be very streamlined and will not need an appraisal as well. However, the rate that I got was 4.1 (but a rebate of -1.477 and 1 point origination + $425 processing fee + $200 application fee + closing costs).

I had talked to a local mortgage broker before this and he informed me that using my income from line 31 of Schedule C (from 2011 tax returns) my DTI is 53% (same for both front end and back end) based on a loan of 196K and 4.125 rate (current rate is 5.125). So he informed me that I would not be able to qualify for an automated approval with any lender due to the high DTI. He recommended I talk to whoever is servicing my loan and see if they can do a manual underwrite which would not take into account the high DTI.  

I have excellent credit(800+), high reserves, never missed a payment (loan originated 1/2009), etc. 

Should I just stick with this since although the rate (and costs) might be a bit higher I won't have much issue with getting approved or can I do better? 

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July 31 2012 - US
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Answers (3)

Who is your current servicer? You stated before and on other post it was locked at 4.1%.   Proceed cautiously!  Is it Green Tree or Seterus?
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August 22 2012
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My loan is owned by Fannie Mae.  

Would I have at any chance of an approval with going thorough a DU Refi Plus that is not HARP with a high DTI? 

Or am I only able to do a Refi Plus with my own loan servicer since my DTI is high?

Bottom line is can I get a regular refi approval with a 53% DTI, 800+ credit score, high reserves, 78% LTV that will give me rate in the 3.625-3.75 with zero closings costs or very minimal for a 30YR fixed?
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July 31 2012
Depends upon whether the underlying loan is owned by Fannie Mae or Freddie Mac.  With a Fannie HARP loan you can get automated approvals well above 50%  (I did one at a 57% DTI).  With Freddie anything above 50% is not possible, and on a surprisingly high percentage of HARP transactions with DTI's well below 50% Freddie's automated system will still deny them unless there are significant post closing reserves. 

Absolutely no logic to the major differences between Fannie and Freddie on HARP refinances when both are equally supported by the U.S. taxpayer. 
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July 31 2012
 
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