HARP - Home Affordable Refinance Program

Harry Fager of Michael Saunders Mortgage Company provided the following information about the HARP program (Home Affordable Refinance Program).

HARP is part of President Obama's Making Home Affordable program announcement in February. It is geared towards helping customers current on their mortgage payments, but whose home values have declined to a point where it may make them ineligible for traditional refinance products.

Highlights:

• Minimal documentation required (in most cases, no income documentation)
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• In some cases, no appraisals required
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• No mortgage insurance is required
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• Rate and term refinances only (no cash out and combining a 1st and 2nd mortgage)
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• If homeowner has a 1st and 2nd mortgage, they must work with the 2nd mortgage holder for it's subordination to the new 1st mortgage.
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• Maximum LTV up to 105% of the appraised value. Unlimited CLTV (combined loan to value).
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• Liberal credit score requirements (as low as 620).
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• The note date of the original mortgage must be at least 3 months prior to the not date of the new mortgage.
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• If P&I payment increases by more than 20% (i.e. due to a refinance from an interest only ARM into a 30 year fixed rate), then income documentation is required and the DTI (debt to income) ratio cannot exceed 45%.
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• The maximum loan amount is capped at the lesser of the payoff balance plus closing closts or $417,000.
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• HARP refinances must fund and close by JUNE 10, 2010.