The Mortgage Corner

The revamped HARP 2.0 loan modification program for Fannie Mae and Freddie Mac loans kicks off this week, which allows unlimited loan-to-values for existing 30 or 15-year fixed rate mortgages owned by Fannie and Freddie, and maximum 105 percent ltvs for adjustable rate mortgages. It should stimulate as many as 9 million refinances of conforming loans, reports Fannie Mae in it press release.

And, nationwide housing starts edged down 1.1 percent to a seasonally adjusted annual rate of 698,000 units in February. This was the second-best pace of new construction since October of 2008 following an upwardly revised 706,000-unit pace in January.

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Graph: Inside Debt

"Builders are reporting increased buyer interest and are expecting demand for new homes to improve in the coming months, but continue to exercise caution regarding new projects until that interest translates into more signed sales contracts," noted Barry Rutenberg, chairman of the National Association of Home Builders (NAHB). "This process is certainly being slowed by today’s overly tight lending conditions, the difficulty of obtaining accurate appraisals on new construction and competition from distressed properties that can make it tough for prospective new-home buyers to sell an existing home."

Here are the HARP 2.0 basics:

  • Unlimited LTV, CLTV, and HCLTV
  • No minimum credit score
  • All occupancy is acceptable (OO, 2nd HM, NOO, 1-4 Units)
  • Income documentation might be required, depending on u/w approval
  • Rate/Term only
  • Max 2X60 mortgage late payments in 2 years
  • Borrower must benefit with either lower payment/rate, more stable payment (longer ARM fixed rate period, or from 30 to 15 or 25 fixed rate)
  • Must be originated prior to June, 2009

Prospective borrowers can look up the Fannie Mae and Freddie Mac websites to ascertain if their mortgages are eligible for the program.

\http://www.fanniemae.com/loanlookup/

https://ww3.freddiemac.com/corporate/

Harlan Green © 2012