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Trying to eliminate PMI in conjunction with HARP?

Is it possible to finance less than what is currently owed (ie. bring more money to the table) in order to get rid of PMI; without doing an appraisal. That is, can I finance 80% of Fannie Maes Harp appraisal amount and eliminate PMI?
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December 03 2012 - Staten Island
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Answers (6)

LLPA are Loan Level Price Adjustments which Fannie Mae charges for things like Loan to Value, FICO score, Occupancy, Property Type, Secondary Financing among others.

HARP loan requires Loan to Value >80% and there is a Cap on the on the LLPA, they are waived completely on 20 year loan or shorter and the Cap is low on longer term loans.

DU Refi Plus is an underwriting method used for eligible Fannie Mae loans that are <= 80%.   It offers relaxed guidelines such as higher debt to income ratios, and also includes LLPA Cap, however these Caps are higher than the HARP version.    (but still less than a "regular" refinance for any applicant that does not have an existing eligilbe Fannie Mae loan).

Your profile will dictate if the caps are a factor, and there is a chance the pricing on your loan would be better for HARP than for DU Refi Plus, however as initally stated if 80% DU Refi Plus allows your MI removed and also an Appraisal Waiver that is the version you should be focused on and applying for.
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December 04 2012
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Ok Justin what is LLPA

What is a DU Refi Plus?

Sorry I am not up on the terminology.
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December 03 2012
If you can close at 80% of the Fannie value, or even 80% of the estimated value when an Appraisal Waiver is offered, then your new loan will not require mortgage insurance.

You would be subject to slightly higher LLPA caps and this could affect the pricing on the loan depending on your profile but would likley be a small adjustment in comparison to MI termination.

Technically speaking you would be applying for DU Refi Plus, not HARP.
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December 03 2012
NY has the most consumer friendly law in the country for removal of PMI. To begin with, if the initial appraised value was higher than the purchase price, the removal; of PMI is calculated on the original appraised value (even if higher than the purchase price).

as for removal with a HARP loan, yes, you can do so.

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December 03 2012
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I had already tried to do that in the past. I called them and asked them what I would need to send in to eliminate PMI. I was sent back a letter stating that I would have to get an appraisal and it would have to appraise at the original appraisal. When I took out the original loan I was told I could pay it down to the 80% of the original appraisal... not so!

It seems like you can never get rid of PMI without forking over hundreds of dollars for an appraisal and lord know what they come up with after you pay for it!
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December 03 2012

I think you would have to do this in two steps.  First contact the lender to find out what it would it would take to pay down the mortgage and remove the MI. Then once removed refinance under HARP. Provided that you get the Property Inspection Waiver from the automated findings you should be good to go. I am not completey 100% on this. Hopefully some others will chime in to agree/disagree.

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December 03 2012
 
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