Another flaw with the HARP program

I received some information today that I found very disheartening.  The HARP (Home Affordable Refinance Program) is a program designed to help homeowners either modify the terms of their loan or refinance with new programs designed to help homeowners who have good credit and payment but lack the equity needed for a traditional refinance.

I’ve read pretty extensively on the guidelines for this program.  I’ve used it for a few clients and have even blogged about the Fannie Mae version of it (labeled the Fannie Mae DU Refi Plus). 

One guideline states that if the loan currently has mortgage insurance, only the existing servicer can refinance on a HARP loan.

One of my previous clients has a Fannie Mae loan with mortgage insurance through Bank of America Home Loans with mortgage insurance.  When he called me about refinancing, I knew I would not be able to do it because I could not go through the existing servicer.  I told him to contact Bank of America directly.

I then found out that Bank of America does not do the HARP loans for loans with mortgage insurance INCLUDING if it’s their loan.  Per the HARP loan program, they can do this refinance, but according to the loan officer, Bank of America  will not do it.

Bank of America in 2008 was the a top 5 lender and had purchased Countrywide who was the largest lender in the nation.  To hear that they were not offering the HARP loan to their existing clients with mortgage insurance was very disturbing.

Now, I don’t want to say they’re not doing it only on the information given from one loan officer, but he seemed intelligent and knowledgeable. 

The tax payers are entrusting our government to use our funds wisely.  The government has created a loan program specifically designed to help these homeowners yet the largest lender in the nation isn’t offering it in the full capacity that it is available.


I started a petition to see if we can get lenders to ease their guidelines and allow all Fannie Mae and Freddie Mac lenders to refinance loans with PMI on HARP.  This has clearly become the largest hurdle left for HARP.  Here’s a link to the petition

If anyone hear’s more information on this, please contact me and let me know.


I’ve been working very closely with colleagues, my mortgage product specialist and underwriting manager to come up with an extensive guide for clients who are considering a HARP refinance.  Three months in the making and the post is finally complete. 

You can read all the details and alternatives to HARP on this related blog post:


HARP has been extended another year.  The new deadline is June 30th, 2011


155 comments to Another flaw with the HARP program
  • P Spear

    December 4, 2009

    Just saw this article. I spoke with B of A yesterday because I had been turned down by another lender in May 2009 because the loan had lender paid mortgage insurance placed on it. I had no knowledge of this. Anyway, B of A says the loan DOES NOT have any evidence of mortgage insurance on it. They took my application for a HARP–quoting what I think is a high 5.75% 30 yr fixed rate. The loan officer told me the only lender that can refi under the HARP is the current lender–even without the mortgage insurance issue.

    How does a person REALLY tell if the loan has mortgage insurance on it?

    Thank you.

  • There may be provisions where you won’t qualify for a HARP loan if your current loan had Lender paid mortgage insurance. T

    If your loan did not have mortgage insurance, you can probably get a loan from any HARP lender. Is your loan owned by Fannie Mae or Freddie Mac?

  • P Spear

    My loan is owned by Fannie Mae.

  • P Spear,

    Here’s how to find out. The loan officer at B of A may or may not know the process of finding out if your loan has mortgage insurance. Lender Paid Mortgage Insurance will not show on any items initially collected for the loan application.

    Whenever a lender underwrites a Fannie Mae loan, they use a software program issued by Fannie Mae called Desktop Underwriter (Also called DU). I won’t go into all the details of this, but this program basically tells the underwriter whether or not the borrower qualifies for a Fannie Mae loan. A term often used for running a customer’s application through Desktop Underwriter is “Running DU”. You can shock the heck out of your loan officer by asking, “Did you run DU? What were the findings?”

    If a loan has no signs of mortgage insurance, there’s still a chance the customer had a loan with Lender Paid Mortgage Insurance (also called LPMI). Fannie Mae keeps track of loans that have LPMI in their system. When the lender runs DU for a DU Refi Plus (Fannie Mae’s version of the HARP loan), it will tell the lender if the borrower had lender paid mortgage insurance or not. If it comes on the findings, the customer does not qualify OR must go through their existing servicer, which I have not heard of any existing servicer’s doing HARP refinances with mortgage insurance (yet).

  • Peter

    I am also dealing with Bank of America. They have no interest in helping customers. They refused to refinance me through HARP even though I qualify per the FHA website. Their reason was the MI on my loan. I would love to find out who the MI is through. Bank of America doesn’t care if any of there homeowner properites with MI default because they are covered by the mortgage insurance. The government should have let BOA go broke, they stink. By the way the current rate for a 30 year fixed under HARP is 4.5%. BOA is ripping you off.

  • Peter,

    That is what boggled my mind when I wrote this post. They’re already the servicer, why will they not do it? My guess is the PMI company needs to issue a new PMI policy and does not want to, even though they’re already on the loan.

    The whole idea of this loan program is to help people LOWER THEIR PAYMENTS. If the PMI company wanted to create guidelines stricter than the Fannie, why wouldn’t they? Just insure the thing…It’s already insured by the company, so if anything, it LOWERS their risk.

    The thing is B of A DOES offer it on non-PMI loans which says they’re willing to take the risk. If anything, those are MORE risky. I’m pretty sure it’s the PMI companies, not B of A.

    As for rates, HARP Refinances have similar rates as regular Fannie Mae 30 year rates up to 95% LTV but higher if above that point. Earlier this week, 4.5% up to 95% Loan-to-value was available but rates did move up since then, so it is higher now. However, 5.75% still sounds high as Peter eluded.

  • Keith Yamry

    I just tried a HARP refinance with IndyMac Bank (OneWest Bank) and I was denied for the same reason, because I have lender paid PMI. Even though they are the same provider I already have for my current mortgage, I cannot refinance! How ridiculous! I would really like to thank Obama, or the whoever is responsible for writing this stupid program for NOT new homeowners in my position.

    Now I’m stuck in an interest only 7.29%/Adj rate loan that is at 115% loan to value and the bank say’s there is nothing they can do at this time..

    What’s the next step?? wait? who to contact???

  • Keith Yamry

    correction- “for NOT including new homeowners in my position”

  • Keith,

    Actually, I think the real problem here is the Mortgage Insurance companies.

    I was originally a little baffled as to why a company like Bank of America would not do this loan because it had mortgage insurance. Let’s review what we do know.

    Fannie Mae will allow a lender to refinance a house with less than 20% equity with NO mortgage insurance up to 105% (125% on new guidelines not yet released for most lenders) without requiring new mortgage insurance. For the lenders, they originate a loan and sell it to Fannie Mae.

    The process is the same for loans that HAVE mortgage insurance but Fannie Mae requires that the customer go through their existing servicer.

    The reason why Fannie Mae does not require mortgage insurance on new loans is because they are already at a lower equity position. They figure their risk is there regardless, so they may as well help borrowers lower their payments.

    The servicers, like Bank of America, are in a similar position. They run the risk of losing money if the borrower defaults on the loan. They figure if they’re lowering the rate and payment, they would be at less risk.

    Now, it gets a little messy when mortgage insurance companies are involved. Remember that PMI is issued by a different company than the lender. The policy is attached to a particular loan. When you refinance it, regardless of who the lender is, the PMI company must issue a NEW policy ofr the new loan.

    Fannie Mae and the government designed the loan with the common sense that even though there is risk in refinancing a loan with little to no equity, they are not worsening their position if the client is lowering their payments and if anything, are HELPING Fannie Mae and the servicer avoid default.

    However, the servicer has insurance from a PMI company protecting part of their assets on the existing loan. They need the PMI company to take the same position as Fannie Mae, which is take on the risk of the loan because since you already have the risk, there’s nothing to lose.

    What we’re talking about is creating a loan that nobody would ever do under normal circumstances, but makes sense under current market conditions.

    PMI is really a form of insurance, which like loans has underwriting guidelines also. We’re also asking the insurance cmpany to create a special policy guideline so they’ll issue an insurance policy on a loan they normallyu would never do, but should under these market conditions.

    I don’t know for sure if this is the reason why the lenders won’t do it, but from a logistics stand point, there is no reason why a lender would NOT do it unless they were losing the only insurance policy they have protecting their assets. It makes sense to me that the lenders won’t do it because they can’t keep the PMI policy. I may be wrong, but this is the only thing I can think of. Two sets of red tape to get around. We’ve passed one, but need to pass the other. Loans that did not have PMI only need Fannie Mae to approve the loan for the lender to close.

    If it is the case, it’s time for the PMI companies to wake up and make changes. They will only see further losses if they do not help the homeowners.

    I would like to find out if this is the cause. It would probably make another great blog post.

  • This really fries me… I was just contacted by a home owner who’s been strung along by a BOA LO for 10 months now on a DUPlus… she has mi… I told her that she has to go directly to BOA just yesterday and to try to find a manager who might be more forthcoming than who ever has been wasting their time.

    The press really needs to pick up this story and (of topic, my apologies) all the stranded Taylor Bean 203k’s.

  • Rhonda,

    Thanks for visiting! It’s good to hear from you.

    Yes, I’ve been talking more with our secondary market about the complications related to existing MI on the DU Refi Plus.

    I brokered a loan to Bank of America over a year ago to a client. When he called about doing a HARP refinance, I sent him back to B of A retail due to the fact he had MI. That’s when I first found out they wouldn’t do it.

    Now the word on the street is ALL existing servicers won’t do it. So when a client has MI, they really don’t have ANY options other than a modification, which not all borrowers are in hardship.

  • Clint


    I just tried to do a HARP refi with BofA and my application was denied due to “Fannie Mae not being the original purchaser of my loan in the secondary market. Even though Fannie owns the loan now, Fannie Mae had to purchase the loan originally in the secondary market in order to qualify.” This seems like the onus is just too great to qualify.

  • E. Garcia

    I also have my loan with BOA. I talked to them several time since 03/2009 and again a week ago and today. Here is my story
    1st call. – Rep ay that Phase 2 of HARP (loan with PMI ha not rolled out). I know its not true. I mention how the media jut released the report that they have made the least amount of modifications in the HAMP side, and I wondered if there were placing the same disregard to the HARP side. I also mentioned how they got out taxpayer money. The guy said the bank had just repaid the money back a few days ago. I knew that was true, but told him the program will still be in effect until next year, so like it or not, the Bank has to be part of the federal program. They guy hung up.
    2nd call. – I asked to talk to someone who will have more specific knowledge of the program. The rep now aid that Phase too had just been implemented according to an email he received as of 12.09.09. Another lie since it has been in place since 09/2009. He did have knowledge of the “pilot program” under this phase 2 and transferred me to a 3rd rep that does appear to be very involved in the HARP side. He said that they are doing refinance with PMI but only to 105% and the federal program it’s the one who has not implemented the up to 125% system. I didn’t have info handy to state the contrary, but then I found the info about the DU REFI Plus manually underwriting procedure and called the Making Home Aff Program directly.
    3rd call. – Rep at MHAP aid the program has been implemented and that BOA should be able to refinance loan with PMI and up to 125%. He also emailed me the Memo from Fannie Mae stating the new procedure.
    4th call. – I tried to contact the same Rep I talked on lat Friday at BOA. she is not available until Monday. Talked to another Rep. I mentioned the info I got from MHAP and he said plain outright: BOA ha not implemented that portion of the HARP since like any other software and programs they are still working to fix the kink the program has now and it harder since there are a lot of sides that need to agree . Don’t know what he meant by that. He asked to try to follow up 3 to 6 month from now. I said that by then the rate would have gone up as they have doing so since two weeks ago. He said I have the right to call again to follow up and the most he could now its write my name down to be able to contact me once the product gets offered by BOA. I told him that I just want sure on what to believe now since the program it tell me differently and the media has mentioned how BOA has failed to assist homeowners in the modification program. He just told me not to believe the media so much.
    All I sense from this is that they are purposely delaying everything since the Treaury no longer has any leverage against BOA and waiting in the meantime for rates to go back up.

  • Nicole

    I have been trying to modify my indymac loan for over 1 yr. and have contacted them directly wanted to refinance through the HARP program. I was told that they do not offer the program for loans backed by Freddie Mac, and all other lenders tell me we can not refinance outside our lender as we have to go through them under the HARP. All signals are mixed up….and I have interest only loans with upcoming ARM adjustments. One of the loans is at 9.75%!!! There just seems to be no help out there for struggling homeowners!!


    Does your current loan have mortgage insurance? You do not have to do your HARP refinance through Indymac if it does not have mortgage insurance and there is a HARP program for Freddie Mac finally. It’s called “Open Access”. Remember that there is a difference between HAMP and HARP. HAMP is a modification where HARP is a regular refinance loan. HAMP does require you work with Indymac.

    See if you qualify for a HARP refinance, which you can read more about on my blog:

    Good luck and let us know how it works out for you.


  • stacey martin

    chase will not finance under harp because wamu classified my loan as low-doc.

    did not know wamu qualified my loan as loc-doc


    Is your loan a Fannie Mae or Freddie Mac loan? Whether your original loan was low-doc or not shouldn’t make a difference. The new HARP refinance is a full-doc loan and all of the risk is associated with new documentation, not old.

  • Jeannine

    “If a loan has no signs of mortgage insurance, there’s still a chance the customer had a loan with Lender Paid Mortgage Insurance (also called LPMI). Fannie Mae keeps track of loans that have LPMI in their system. When the lender runs DU for a DU Refi Plus (Fannie Mae’s version of the HARP loan), it will tell the lender if the borrower had lender paid mortgage insurance or not. If it comes on the findings, the customer does not qualify OR must go through their existing servicer, which I have not heard of any existing servicer’s doing HARP refinances with mortgage insurance (yet).”

    Can you please advise if these steps are to be taken BEFORE an appraisal is ordered?

    Thank you!


    When the appraisal is ordered is determined by the lender. They lender SHOULD check before ordering but it could happen that the lender didn’t do the proper research before ordering the appraisal.


  • Jeremy

    So I have been working with Chase trying to get into the HARP program. I have a Fannie loan, but have been told I have a low-doc loan, so they cannot do it. They also told me “internal reasons.” I have tried to get them to explain, but have only gotten people mad who eventually hang up on me. I assume because I ask too many questions.
    So can anyone tell me why Chase would not do this? I do have PMI on my loan which is a 30 year fixed. I am under the 125% required by the HARP program. As stated in comments above lowering my interest rate will only lower their risk as the payment would be easier to make. I have never missed a payment, never been late, and have great credit. My only issue is I cannot refi because my house value has dropped due to the foreclosures (not my fault cause I pay my loan).

    Is the reason Chase will not do my loan in the HARP program because I have PMI on my loan? Or could there be “internal reasons,” or document issues? My personal thought is they don’t want to do it because they will make less interest therefore less money. Chase has been VERY rude everytime I have falled. I have also contacted Fannie Mae to see if they could tell me why Chase says they cannot do it. Fannie Mae said they could not see why I wouldn’t qualify, so they escalated my call to a “level 2” and I am suppose to get a call back. I will be shocked if I receive that call.


    As strange as it sounds, Chase would MAKE money doing your refinance.

    Fannie Mae and Freddie Mac loans are sold for a profit. If they did a HARP refinance, they would be able to collect fees at closing and sell a new loan to Fannie Mae or Freddie Mac, so it’s not for profit purposes. Fannie Mae and Freddie Mac are the ones who collect the interest. Without getting into too many details, this is not the reason they won’t do it.

    However, many lenders have not adopted the 125% loan-to-value guideline. This may be the problem. Also, there have been complexities with doing these loans with PMI. It’s either one of these two things or both in my opinion.

    Unfortunately, the loan officers you’ve been talking to obviously don’t have the answers for you. Hanging up on you doesn’t seem like a good answer, but lots of questions should not be the reason for hanging up. As loan professionals, our job is to ANSWER the questions of homeowners. If no answers were needed, we wouldn’t have a job. Our job is to answer questions for consumers. Just my two cents.


  • Jeremy

    Another thought. I understand the reason behind MI, but isn’t the HARP program backed by our government? If so, why does the loan still need MI? Cause wouldn’t then the loan be backed by the government and the MI company?

    I have issues with the MI (though it would be nice not to have), but I would be happy with a lower interest rate. Something close to 5% instead of almost 7%.

    The reason why MI is so vital is because the LOAN is backed by the government but the INSURANCE is backed by a private company. The private mortgage insurance company is a true, non-government controlled entity. The issues are probably related to the PMI company not wanting to issue a new policy (even though it doesn’t worsen their position) or elevated risks on the lender’s behalf.


  • Jeremy

    Correction……I have NO issues with MI.

  • Mike


    I’m having the EXACT same problem with Chase (and with almost the exact same rate as you). Do you think we can take this conversation offline? Maybe if we can share some info we can get something done.

    My email address is


    I’d be happy to be included in those emails as well to help.


  • Jeremy

    Thanks for your reply. The 125% is not the issue, because that is the one question Chase did answer. They will do the 125% loan (or less obviously). PMI is my thought, but since they wont give me details I really have no idea.

  • Jeremy

    So I talked with a local Chase rep to see if I could get a better idea of why I don’t qualify for the HARP program. The rep didn’t see why I wouldn’t, so he tried multiple ways to enter my info into the Fannie May “DU” software and it always came up denied for approval. The reason being debt to income ratio. However the local Chase rep along with myself don’t understand this. With all my payments included I was only at 40% of my income which he says should work. He even tried to wipe out my debt (car and small student loan) to show I only have the house which then brought it down to just under 30%.

    Long story short he tried, but says there must be something else on the loan from when it was originally done that is sending up the flag. He beleives it has nothing to do with my debt to income as he has seen them approved all the way up to 80%. Basically again I am at the same point with no answers. The rep told me to call him back once a month until the program ends to see if he can get a different result. He doesn’t know why (or so he says) but tells me he has had issues with others in the past and then all of a sudden one day it will work. I am still fully confused and frustrated………………

  • Jeremy,

    You’re correct in that there’s something DU does not like. 30% debt ratio is not the problem.

    Can you obtain a copy of the DU Findings?

  • Jeremy

    I cannot for whatever reason get a copy of the DU findings. The local Chase rep seems not to understand it either. He is going to try again next month, but for whatever reason no matter what he does right now it says its a debt ratio issue. He thinks it just defaults to that as an error, but is not sure why.

  • Jeremy,

    It’s trial and error on the address my friend. Do everything you can to enter the address in different variations.

    For example, I had a file where the loan was clearly a Fannie loan. It said so on the credit report.

    The property lookup tool had the address saved WITHOUT A SPACE between the house number and street name. This verified it was a Fannie loan. We re-enter the address in DU and still no Refi Plus findings. We then spelled out the street name and kept the address without the space, voila, DU Findings work.

    This is why it’s so important to research and research over and over again on the address before giving up. See my post “Homeowners Guide to HARP” to see all the recommendations I made. I seriously think that half of the customers applying for a HARP refinance are being turned down when they could qualify.

  • stacey martin

    JPMorgan/Chase told me I was a low doc and they would not refinance me under the
    Presidents Plan, I tried to work with Chase, but they kept stalling, each time a different answer. When the Open Acccess was available, I called Freddie Mac for a participating list, and Freddie Mac told me to call each lender. A broker called me, and the broker check
    the status of my Freddie Mac and showed me I was eligible for any of the loan programs.
    Chase just wanted the money. With a credit score greater than 750 and my house appraised at 400k, with a balance of 284K, I went with MetLife and paid Chase off. I got more calls the last fews days before settlement and after from Chase waiting to talk, must have been that payoff request that got there attention. My original loan was WAMU, and Chase said WAMU coded the loan as low doc, that is BS. My money will no longer be supporting Chase, I even cancelled any credit cards backed by JPMorgan.

  • Dave

    I called BoA again today – still not doing HARP refi for PMI customers.

  • Dave,

    At least they’re subordinating their second mortgages when the homeowner is doing a HARP loan on the first. Every major bank (that I know of) has begun subordinating their second mortgages to allow homeowners to refinance their first mortgage EXCEPT Key Bank:

    Now that we’re officially 1 year into HARP with a 1-year extension, maybe we can get lenders to do HARP with PMI and subordinating all second mortgages before May. This would give homeowners at least one year to attempt a refinance that they SHOULD’VE QUALIFIED FOR A YEAR AGO!

    Sorry, I get so angry about this.


  • Keith

    Re: my last post- I talked to my mortgage insurance company (PMI co.) and are in total cooperation with creating new policy’s for these loans, the forms and such are all very clearly posted on the web for anyone to see.

  • Keith,

    Yes, most PMI companies are fine reissuing the policies. Some lenders are starting to do these refinances now, but Bank of America still is not.

    The last I heard, Wells Fargo and Flagstar will do a HARP refinance with PMI if it’s their loan.

  • Jeff


    I have been around the entire western division of BofA chewing my way through levels of managers until I get to “Regional Vice Presidents” and I find it so frustrating that I am told I am not eligible for the MHA act because I have lender paid MI. So under my own research I send them this
    And suddenly now I am eligible, but BofA is choosing not to do LPMI because their systems are not setup to be able to process them.

    I actually have a letter into my congressman to address this specific issue because I agree completely, BofA being one of the largest lenders in the company too many people are falling through the cracks on this one. And until we can get the system fixed to get the MI companies on board and make these happen this is just lip service.

  • Brad


    I’m in a similar situation as many of your posters. I have a loan through Chase Home Finance with LPMI. I’m currently at 6.75%, and would love to refinance in order to take advantage of the current low rates. However, I have repeatedly been told through Chase and independent mortgage consultants that I have to refinance through my original lender, which is Chase, but that Chase will not offer HARP loans if your existing loan has LPMI. I’m falling through the cracks here.

    Now, to make matters more complicated, I received a letter today from Chase Home Finance that my loan is being reassigned to IBM Lender Business Processing Services (LBPS) as of August 1. However, LBPS does not offer refinance or lending services. What am I supposed to do about refinancing under this new arrangement…if my current lender doesn’t even lend on new loans?

  • Brad,

    Hopefully a solution will come soon for you. PMI companies are re-issuing PMI certificates with new lenders and hopefully enough complaints can push lenders to re-do mortgages with PMI. Your situation is a common one.

    What is your approximate value vs. your loan balance?

  • Brad


    My loan balance is $247K and the last county appraisal was placed the market value at $245K. I’m not sure how accurate or close that would be to a private appraisal; I’ve found that county appraisals tend to be a little lower than market. When I purchased the new condo about 2 years ago, the appraisal was $257K. The physical condition of the unit has only improved since then, but I also know that market conditions have changed slightly.

    BTW, will IBM LBPS be considered my “new lender” when the loan is reassigned? If so, how do the HARP requirements of using the “current lender” affect me?


  • Brad,

    I’m seeing more PMI companies state they will re-issue existing PMI certificates on HARP loans, so I’m hopeful that you do not need to go through your existing lender in time but that’s just a hunch.

    If I were you, I wouldn’t wait. HARP will make you pay PMI anyways and a HARP loan over 95% has a higher rate. I would do a no-fee FHA loan which you should be able to get at 97.15-97.75% of your home value. Rates would be in the mid-low 4’s. I would also have an unsecured loan or 401k loan on the side to cover any difference between the appraised value and the loan amount. If you wait too long, values may drop further and this option may look less feasible.

    Key Bank has unsecured lines of credit up to $30k. Even a good sized credit card would do the trick. You would save so much money on the mortgage that paying off that small/second loan would take no time at all going from 6.75% to the rates available today.

    I’ve estimated your current payment without taxes and insurance would be about $1667. A FHA loan at 4.5% WITH the monthly MI is $1353. That’s $314 less a month. You would need about $10k to cover the pricnipal difference and money to start a new escrow account (unless you had cash to pay this). At a 7.5% unsecured line of credit, that payment would be $50-100. You would skip one mortgage payment and get an escrow refund of what was in your old account, which you could use to pay down this line in 2 months to about half.

    Options like this are not available to homeowners who are heavily upside down in their equity, but it’s something that may be available to you. I wouldn’t pass on it. Be sure to keep enough money available to cover a larger difference in appraised value just in case the appraisal comes lower.

  • Oleg

    I just called BOFA about refinance under HARP and they said they can do it BUT my loan to value should not be more than 105%. My mortgage is PMI insured (Fannie Mae owned) and loan to value is approximately 110%, so I have to come up with additional amount to cover 5%. When I asked them about new HARP update regarding 125% they said it does not apply to me because I have PMI. They quoted me a rate of 5.375% with zero points (approximately $4400 in total closing costs) – 256K total loan. After asking for lower rate they quoted 4.5% with 2.875 points, which seems to high for me ($10500 in total closing costs). Would I be able to refinance with different lender if I have PMI and my mortgage owned by Fannie Mae?

  • dand

    4.5% with 2.875 points is super high.

    Check this site:

    I’ve done a refinance through them and they’re great to work with.

  • Dand,

    You’re correct, that cost is high, but Oleg doesn’t have another option. No company, including the one you referenced, can refinance his loan on HARP with PMI other than Bank of America. Did you have a PMI loan refinanced on HARP through the company you referenced? If so, that would be news worth sharing since I haven’t seen anybody who will touch these.

  • Oleg,

    Please let us know if they allow you to close under a PMI HARP loan. The pricing is high but it’s your only option since you have PMI, so I would take it if I were you and it made sense financially.

  • Oleg

    I am still trying to shop around. I knew they are trying to overcharge me. I just called PMI company (I am insured with them) and they said that I can refinance under HARP with any lender – they support this move (it is even says on their website). I am really confused…

  • Oleg

    Keane and Dand,
    Thank you for your help

  • Oleg,

    Yes, and HARP doesn’t restrict you to only use your lender now but the only confirmed/approved PMI HARP loans I’ve heard of were Wells Fargo and Flagstar Bank, which they only did their own loans they serviced. I have another customer who found a lender who states they can do them but I haven’t confirmed a closed client. Too many times I hear somebody will do it but they won’t.

    I really hope you’re right! This is the last major hurdle in HARP.

  • Kassie

    Skank of America is the sleeziest bank in the world! I have a mortgage with them that is $100,000 underwater due to the economy. I applied for HARP 3 months ago and no one will get back to me! In the meantime, Skank of America reduced the line of credit on my credit card (was $40,000 for 8 years). They limited my line of credit to the amount I owed $1100.00!!!!!! Because of their sleezy tactics, I am not paying my credit card or mortgage, and will live free in my house for 1 year until they foreclose and lose over $150,000!!!! I guess it is worth ruining my credit. I’ll just rent at the beach! NEVER do business with Skank of America!

  • Oleg

    I just confirmed with a friend of mine (did two mortgages with him) – they can not do refinance under HARP if you have PMI. You have to go ONLY through your servicer/lender. Please keep us informed if you get some information regarding refinance with PMI. I hope in September administration will come up with some better ideas taking into account that home sales at their lowest number (today’s number). On the other hand, BOA is really trying to screw me with closing costs.

  • Bradley

    I’ve been having many of the same issues while trying to refi through HARP with my current servicer, GMAC, since April. Just one obstacle after another! After being told by loan agents and the manager I’ve been dealing with that LPMI disqualifies me from HARP, I found information on the Freddie Mac website to the contrary. Then they told me the problem was in securing a new MI policy. After subsequently finding out that my MI (Triad) was perfectly willing and able to re-issue the certificate, and directing GMAC to the MI website with the FAQ saying so and even the request form itself, they now tell me it is simply GMAC’s “proprietary policy” not to do these loans, because their “system” isn’t set up for it!? Every time I’ve provided them with specific information to refute their “reasons” for not doing the loan, it’s “well, let me email xyz, and I’ll get back to you tomorrow…”: weeks later, no follow-up, even after filing (and escalating) executive appeals!
    I agree, we should have let these sleazy banks sink!!!

  • Oleg,

    I just talked to a B of A rep and they said “no” on PMI HARP loans.


    They’re taking the same position as Chase and B of A. It’s not that they can’t, they WON’T.

  • Bradley

    Just sent letters to my Representative and Senators about this. These discriminatory tactics can not be tolerated!

  • John

    Under the FannieMae Website “the government program” q.50 page 16 says any loan WITH Lender paid mortgage insurance IS ELIGABLE for mha refi under the existing lender as long as the loan was established before may of 09′

    Take this to your lawyer and pursue your current lender

  • Oleg


    If I had enough money to hire a lawyer I would refinance giving 20% down, dropping my payments almost in half.

    You are right now. I called the one who just told me few weeks ago that she will do it, she “can’t” now. They do not want to deal with PMIs because it requires a lot of manual work and time (wait for the lender approval, then for PMI company approval, then again for the lender approval). The loan officers want to make quick buck on simple regular refinance without going through too much hassle. This program is a crap unless the government specifically requires lenders and servicers to comply.

  • Oleg,

    I hate to be right when it comes to this topic. I’ve heard rumors that lenders will do PMI loans serviced by others, but nothing has ever been concrete. There’s still only a handful of servicing lenders that will do them.

    it’s not the loan officers. Trust me, the work is not the problem. Their lenders won’t do them. The “manual” work they’re referring to is not them. It’s the liability the lender takes for doing these loans.

  • Wee

    Hi Keane,

    Came across your website after countless phone calls to BofA and even had a representative doing a three way conference with a BofA loan officer.

    BofA is rejecting my application for HARP refinance because I have a lender-paid mortgage insurance and my LTV is 120%. They claim that it is Freddiemac that set the conditions even though Freddiemac website states that mortgages with LPMI is eligible and up till 125%LTV.

    I have written to Freddiemac general email enquiry system, wrote to the White House email system, don’t think I will hear anything soon or at all.

    One BofA loan officer states that it is the investor that do not want to participate. I have emailed him asking who is the investor. Freddiemac securitized my loan, are they the investor? Have not heard anything yet.

  • Rick

    I’d am interested to know how this turns out for you. I have LPMI with Bofa and was told I did not qualify for HARP because of it.

  • Wee

    Freddiemac reply back that I have to reach out to BofA. I email BofA Presidents and they assigned a customer advocate who got the same answer from the VP of loans.

    What I understand is that BofA pay a one time lump-some for the MI. So in effect my mortgage loan does not have any actual monthly lender-paid MI.

    I try to find out how much the lump-some payment was and how was it calculated into my existing monthly payment. BofA reply is that they set their own guideline to exclude my type of lender-paid MI even though Freddiemac website indicates that lender-paid MI is eligible.

    I do not know what other action can I take. I need to look more closely at my loan document and also seek other people opinions if BofA is treating me fairly by excluding my type of mortgage loan from participating in HARP refinance.

  • Maybe I should start a petition?

  • Oleg

    I emailed my bank (Office of President) regarding HARP with PMI (Keane they told me many times, over the phone, they won’t do it for loans with PMI). I wrote if no response is received in one week I will submit complaint to my senator, AG and OCC. Fannie Mae says I am eligible; PMI Company says I am eligible, Bend Over America says I am not or they are not sure.
    I believe this is the time people should pressure and complain about their lenders and servicers – it is very good time. I assume many of you heard the bill that passed House and Senate quietly few days ago (will be vetoed by Obama) regarding foreclosures; many banks stopped foreclosure process and many states are investigating those practices. By the way, try to google Bend Over America foreclosed on person WITHOUT MORTAGE in Florida?

  • I made a petition! Please log in and sign.

    Oleg, I’m sorry you’re not getting traction. I hope that this petition gets enough signatures that it works.

  • Mike Lee

    It’s good to see people like yourself is educating people like myself who doesn’t know as much as I should with taking advantage of the HARP Program.

    I called my lender which is Chase and the first person I spoke with told me I qualified since I fit all the criteria’s and it’s a Freddie Mac owned loan. I didn’t go through the application yesterday to go over the details with my wife. After deciding to apply for it, the first person I spoke with was unavailable and was able to talk to another person. This person told me that we don’t qualify to refi through HARP because it’s an excluded FHLMC loan. He continued to tell me that it was excluded because it was a the loan originated through a broker and then transferred to Chase. I’m very upset that I’m not able to but have you heard of this and is there no way I can refi through HARP? By the way, it’s the only way I can at this time considering all the circumstances. Would calling Freddie help in any way or am I wasting my time?

  • Mike,

    Freddie Mac loans are eligible for HARP. In fact, it must be Fannie or Freddie backed.

    The servicing lenders may be able to do some things that outside lenders can’t but it seems it goes both ways. If your loan doesn’t have PMI, another lender can do it for you. Don’t go to another big bank, go to a broker or an independent mortgage company. You can contact me directly and I an refer someone in your area.

  • Mike Lee

    Hey Keane,

    Unfortunately, my loan does have PMI so I have to go through Chase. I meet all the criteria’s but Chase is saying that this loan is backed by Freddie but it originated with a broker and it’s not qualified. Have you heard anything like this before? I’m looking to call Freddie on Monday since they’re closed on weekends. By the way, the last person told me the same thing and kept trying to sell me on getting a FHA loan instead. Which isn’t good for me since I have to put some money up and with the FHA loan, the PMI is more than doubled on what I pay now. If I had it my way, I would do the refi under HARP. Have you heard about certain Freddie loans being excluded from HARP?

  • Very nice write-up. I just bookmark your web site and wants to be able to say that I have really enjoyed while reading through your posts. Thank you for sharing the information with all.

  • Sharon

    Keane, You stated “Fannie Mae just updated their underwriting software (Desktop Underwriter) to require LOWER debt ratios this month, so that will affect Fannie Mae’s HARP refinance program (DU Refi Plus).” We are 3 mos. into the refi process w/Wells Fargo for a HARP. We were told the loan was going to close on time. Then yesterday 12/23, told the HARP was “nixed” because we closed an equity line of credit at the start of the process. Our loan officer said it was some “obscure” rule of HARP that they were not aware of. The Wells we have been dealing with has continuing personnel problems, another factor in the delay. This has caused processing issues, one of which was the Processor not catching the “obscure” rule. Wells was aware at the start we closed the line of credit, in fact we recall being told to do this as well as pay off a couple small balance credit cards. The loan officer denies telling us to close the credit line. To try and protect our interest rate (lowering our loan paymts $450.00/mo) Wells is going to switch us to a conventional loan but can’t guarantee this will go thru in time. They’ve given us a 10 day ext. and if this doesn’t work, our loan officer says his commission will pay for another 25 day ext. With all the delays we’ve experienced so far, we doubt this will be enough time. Back to what you stated about the debt ratios, how would I find out if we would now qualify for HARP? Maybe our loan application went thru before the ratio change? Or would the “obscure” rule still apply? Do we have any recourse if Wells Fargo’s mismanagement makes us lose out on a lower interest rate? Our loan officer has been telling us of the numerous mistakes his office has made. Thanks for any info you can give us.

  • John

    I have an intrest only loan I was trying to get refinanced. Made it all the way to signing then I was told they could not finish the loan because my PMI would only refy to 105% but the harp program will fund up to 125% my loan ended up at 117% within the harp guideline but the PMI would not allow it. WHY does the government implement a program without keeping the same restrictions on PMI . If the Harp program is 125% then PMI should of also followed suit to 125%. I fear when my rate resets in 2016 it is going to force me to walk away this is rediculous !!!!!

  • John,

    Don’t completely give up. Your situation isn’t as dire as others. The PMI company may loosen their guidelines and allow your refinance. Find out who the PMI company is and set a reminder to call them every month to see if their guidelines have changed. They’ve loosened guidelines for PMI consistently over the past year. Hopefully your situation gets fixed.

    Any homeowner who has PMI on a loan that was with Countrywide (previously the largest mortgage lender in the nation) and is now with Bank of America cannot do a HARP loan EVEN IF THE PMI COMPANY WILL INSURE IT. That’s a huge problem.

    Your problem may be resolved, so I’ve got my fingers crossed for you. If you can, let us know who your lender and PMI company was so others can find out before they pay for an appraisal.

  • alex

    I have a fannie mae backed loan without PMI, and I am trying to refi with my lender: Im told that if the loan originated after 3/09, that the new loan, even though it fell below 125%ltv would require PMI; which is that case?

  • Alex,

    That’s correct. It’s not eligible for HARP if it was securitized by Fannie Mae after March of 2009. It must fit traditional Fannie guidelines.

  • Jessica

    All of the posts sound extremely familiar. We applied for a HARP re-fi through BOA. They told us we qualified and a few weeks before close came back and told us we did not due to some restriction. They would not tell us what restriction, but we do have PMI with them. They knew that all along. So now they want us to go FHA. More $ out of pocket and we will have to do repairs on the house. Now interest rates have gone up since then, too. So other options mean more $. Sounds like a bait and switch routine and I am disgusted!
    Thank you for all the great info on your page and lets hope something can be changed on this. I signed your petition.

  • Jessica,

    It’s not a bait and switch. Just poor handling of your loan. They profit from HARP and FHA refinances. The extra fees for FHA doesn’t go to Bank of America. It wouldn’t appear this way if they just told you they didn’t do PMI HARP loans from the beginning, but it’s hard to trust anything they do when you find more about their policies online than when you talk to their loan professinal.

  • Deanna

    I am going through the refi HARP program with Wells Fargo(it’s my only choice at this point) My loan process started 02/21/2011. On 02/22/2011 I get an email from the processor with the GFE, GLA, and loan requirements. On 02/23/2011 WF has all the requested info. On 02/24/2011 my ins company calls me stating WF called requesting a copy of the 2011 renewal and it’s effective dates. The ins company could not provide a renewal because current coverage does not expire until 04/28/2011. The ins rep said the processor was very rude, and stated that she would call me notifying me that my loan WILL NOT CLOSE because the ins company would not provide the necessary info. (Keep in mind, we are scheduled to close 03/26/2011, which is before the policy even expires) Question here…..Isn’t only the current policy, and the effective dates required? One, it’s more then 60 days before the current policy expires. Two, the ins company does not have access to the new policy info until 20 prior to renewal.

    The ins company was willing to sent current policy info, but the processor said she would not accept.

    Then, my husband receives voice mail from the processor stating that WE needed to “handle” the ins company, if not, then we would need to shop for a new policy elsewhere. If we do not get a new policy, or receive a response from ins with the NEXT YEARS effective dates, they would not close on the loan.

    I really need help. Can they do that? Who can I call/complain to about these sneeky moves WF is trying to pull on us? I mean really, WF is not motivated to refi us because it is currently at a higher rate.

    Did I hear from someone on here that there is a cap of $2500 on closing costs? Is that different by what state you live in? Just wondering, because my GFE is almost $4000 for closing costs. And they are not transferring escrow, they are making us set up a new account (they hold the loan….WTH?)

    I think this is a tactic so they don’t have to do a refi for us.

    Thanks in advance for your help.

  • Deanna,

    There’s more missing here. Yes, the policy doesn’t renew until March, but Wells Fargo needs to make sure that the insurance company has the right lender info for the mortgagee section of the policy. Basically, if the house had a fire, the insurance company would be protecting the lender. This is very important.

    If this is the situation, it’s not Wells Fargo’s fault, is is the insurance company. They need to make sure a new binder reflecting the correct mortgagee info is on the binder. Even if you have Wells, the mortgagee info may have changed and the processor needs this changed to close the loan. This is legit.

    I’m speculating at this point but they don’t pay processors or loan officers to work on a loan and kill it on purpose. These loans do generate a profit for the lenders.

  • Deanna

    WF is my current lender (mortgagee), and they have had my home owners ins info since the loan was sold to them. They would also would know if any leins are on the house because of the title search, correct? It is more then 60 days before my current ins policy expires (04/28/2011), the current policy states that it is an annual policy that is effective 04/29/2010 through 04/28/2011.

    From what I am seeing from the research I’ve done, WF has drug their feet with the HARP loans, especially with current customers because they will lose money by refinancing me at a lower rate. What I really need to know is can WF deny me over a ins policy that is not even in effect yet if I am currently coverd, and will be before we close the loan, as well as when it renews 04/29/2011?

    Thanks for your comments Keane

  • Deanna,

    It sounds like this would be the case but WF actually makes money when you refinance. It’s just poor handling of your loan.

    There’s a chance that the mortgagee info doens’t match. I’m not defending them, but I know how they are paid and they will benefit from you refinancing. The government buys these loans from them for a profit, both the original one they did and this new one. There’s no reason to not do the loan for you. It’s likely just negligence.

    If you need a better WF loan officer, let me know but you’re so close to finishing, I hope they can just finish this for you.

  • Jeremy

    My loan was with Chase, but was sent to LBPS whom I am told doesn’t refinance. I do have a Fannie Mae loan which originated in 2007 and was trying to refinance through Chase (for literally 1 year). Now I have to start over. I live in FL and my house was under the 125% marker set, but likely is no longer.

    My loan does have PMI, I have an 800+ credit score, no major dept, and never missed a payment. Yet somehow I cannot get a lower rate? I have tried every program I can find, but have no luck and I cannot show financial hardship as I have been in the same job almost 8 years. LBPS tells me to call Fannie Mae which gets me no place. Am I really just stuck at my 6.5% rate on the year fixed?

  • Jeremy,

    Since LBPS isn’t a loan origination company, only a servicer, yes, you’re unfortunately out of options. If your loan was serviced by a company that also originates loans, you may have had an option to do a HARP refinance.

  • Jeremy

    When my loan was sent to LBPS for service many others with Chase was as well. Does Fannie Mae have anything to do with this, or not at all? Just curious as to why mine and many others who were trying to do a refi (and ones that weren’t) got stuck with LBPS as now there is NO way we can qualify for anything but a standard refi. Which, unless you want to put a bunch of money on the loan and get it out of underwater situation is not possible.

    And, is there any talk for an additional program that helps people out who want to keep their house, don’t want to walk away, have never missed a payment, good credit, and just want a better rate? Typically a home is suppose to be a good investment. These days I should have just bought another boat as they hold value longer than my home… :)

  • Jeremy,

    This is only the case if your loan has PMI. If your loan doesn’t have PMI, you can refinance under HARP through another Fannie Mae lender.

  • Jake

    I have a home purchased in 2007 through Countrywide, now BoA. It’s a 30 Year Conversion ARM/w PMI. I want to refinance through HARP. According to FannieMae, I’m eligible. BoA says I’m not because I have Lender Paid MI and Fannie will not secure the loan. That makes no sense! BoA blames Fannie … and Fannie says to talk to BoA. Are there any other options?

  • Jake,

    It’s B of A, not Fannie. If the PMI company is willing to re-issue the PMI, Fannie will close the loan and the PMI company will insure it. Sign the petition I linked above. I made it for you.

  • Thomas,

    I’ve seen and heard many people state they can do these but have yet to confirm one lender who’s closed one. This is also an open format blog, so please share so everyone here can learn how to do this.

  • Gavin

    Put me in the LBPS boat. The only thing I will add is that they told me they “outsource” their refi’s to Quicken loans. Not sure if this is a formal contract or what but Quicken already told me they can’t do it. I also have LPMI with 3 years of good payments ~93% LTV, but high DTI. 8.375% 40 year fixed. I stand to save $700/month with a refi. It makes me sick…

    I have rental income that will help my situation but no one seems to be able to count it to help DTI. Any ideas?

  • Gavin,

    Part of the reason you have a high DTI is due to the terms of your loan. Can’t you just do a FHA loan? The mortgage insurance on a 4% something rate should still be much less on a shorter term loan and FHA loans allow high ratios if you talk to the right lender. What state are you in? Email me if you want me to refer you to a lender who can help you.

  • Jeremy

    I have asked a couple questions here and have one more. I live in FL and purchased in 2007 and am 30 years old. The value on this home has dropped by about 110k. My DTI is great(under 5% without house), credit score great, but I dont qualify for any refinance programs. I can afford my payments, cannot do a standard refi since my LTV value is likely 140% or more.

    Should I just walk away? I know this will hurt my credit score, and I will have to rent for the next 5-7 years. I am sure my value will not be back for at least 10 years likely more, so is walking away my best option? FLorida is also a recouse state, so is there anyway to insure the bank cannot come after me for the remainder of the loan?

    Any thoughts, or know someone in the state I should discuss this with? Thanks

  • Jeremy,

    Your questions are really better suited for a local real estate attorney.

    Can you move into a rental home and rent this home and wait for the market to recover? Yes, it’s underwater but it will be better for your credit.

  • Jeremy

    I have thought about that. Even thought about buying another house and renting this one. Issue with renting is that I cannot rent it for what the payment is. The rent would be about 1k short each month.

    If I could just refi and get a better interest rate I would certainly keep it and live in it or rent it. Since I cannot refi it letting it go would be more of a business decision as I could be putting this money into a good investment versus losing more each month. Since I have no emotional attachment to the home it may give me a better long term deal as I can be earning interest instead of flushing more money.

    With all these government plans out there I wish there would be a plan to help those who can afford what they have and would pay the upside down mortgage if there was a way to get a better interest rate.

  • Jeremy,

    There technically is. HAMP fits the requirement but they rarely get approved.

    If you do a short sale, it only takes 2 years to qualify for a conventional loan and 3 years for a FHA loan. If you do decide to let it go, be sure to build your credit right away so your credit will recover from the hardship.

  • Jeremy

    I tried HAMP a year or more ago. It was not approved either because of PMI, or cause I couldn’t show hardship, or both. Also my payment is far under the 31% gorss income I beleive required for HAMP. I forget as I have tried many routes to get a lower rate.

    I have never missed a payment in my life so rebuilding credit would just take time. Good to know it would only take 2 or 3 years to qualify again.

    I don’t know what you know about IBM LBPS for a processor, but they took over my loan and are nothing but a pain to deal with. They are actually another major reason I may let this go. I am gone frequently so at times my payment is not there until a day or 2 after the shown due date. But always well within the grace period that they and most servicers have. They literally call you the day its due if they have not received the payment and every day after until they get it. Even though it is in the grace period. Its rather annoying and I refuse to pay them online. My feeling is if they want the payment by the date then take away the grace period. Otherwise don’t bother me until after the grace period. :)

  • Jeremy,

    Tell me about it. I hear about these complaints all the time. You tell them the payment will be there on the 5th, and they have the nerve to call you everyday until the 5th. Horrible.

    Yes, you’re pretty much stuck with a IBM LBPS PMI loan. Sorry!

  • Liudmila

    We tried to refinance our existing mortgage. We turned to Cenlar (the current servicer – our original lender was TBW, which – of course – went under and Cenlar took over as the servicer, while Freddie Mac now carries the loan directly). Cenlar told us to contact Freddie Mac. We found a list of the HARP participating banks on Freddie Mac’s site. We filled out the app with one of them, they said everything looked good for us to refinance at 125% of value. When the bank contacted Freddie Mac, Freddie Mac said that our morgage has PMI. Because of that, the bank now said that they would only refinance at 105% of value. We started checking all documents we had from the time we closed on the mortgage. The HUD settlement statement indicates nothing about PMI. We are not paying PMI either. We called Cenlar again. This time, they said that the PMI is lender paid, which is peculiar since TBW went bankrupt two years ago and the current loan owner is Freddie Mac itself. Eventually, we were able to beat the PMI account # from Cenlar and called MGIC, who confirmed that we have lender-paid MI, but that TBW pre-paid the entire UNKNOWN PMI amount at some UNKNOWN time. So, here are the questions (finally).
    (1) HOW do we even know that we actually have lender pre-paid PMI (as opposed to Cenlar making some data entry error at the time when some TBW’s loans transitioned to Cenlar)?
    (2) Is there any hope of getting rid of it in order to refinance with HARP?

  • Liudmila,

    Unfortunately, you probably do have lender paid PMI. If you didn’t put 20% down and it’s a Freddie Mac conforming loan, there’s PMI. This may not have been explained to you at the time you took out your original loan.

  • Liudmila

    Hello Keane,

    Thank you for your response. Where (in which documents) would I be able to find that my mortgage has lender paid PMI? The Final HUD Settlement statement does not indicate that I have PMI, has no MI case number – section 1002 on the statement is blank. Please advise.

    Thank you,

  • Liudmila,

    It wouldn’t show on the HUD unfortunately. Nobody could’ve predicted that having lender paid MI would keep people from refinancing because HARP is a special program that would not exist if it weren’t for the crash.

  • Douglas P

    I closed a loan in 2007 and paid for the NO MI program, I chose a higher rate of 7.625 I/O rates were high at the time of purchase, but we chose this as MI made no sense, it only protects the lender and at the time they clearly indicated I was in a No MI program. I even have the closing docs that show where they could have selected LPMI or BPMI, but they didn’t select anything other than the box that clearly states no MI. Well after going through 3 years of Refinances, HARP, CRACK and HAMP they all deny me. The last resort was the HARP program that fit my mold perfectly. Well after going through OWB’s great streamlined underwriting (j/k) process they denied my loan for harp stating that when Indy Mac went bust my loan was sold to Fannie Mae and insured. They never indicated that a modification of sealed document was changing but now my fight is that they say I am insured with LPMI and it clearly did not state that on my closing paperwork. Can they open a sealed file or agreement modify it without my knowledge and now deny me for that reason?

    Keep in mind, we are fortunate that we are not late on any liabilities and havnt been for the last 20 years, we just wanted to start paying principal and its not being aloud.

    I am in the process of sueing my lender and Fannie Mae for Fraud, you cant change terms of an agreement without notifying all involved, we got nothing other then a handful of denial letters.

    Went to see an attorney and he told us to walk…

    On time kept up with our obligations and this is how they treat us…I am confused that we are now walking away from our home. Keep in mind property values have taken as much as a 55% hit, so that tells me that it could talk 11 years at 5% growth each year….Another statistic, BK here we come….

    What bums me out is that we are now ruing the chances of the other owners in our building from being able to do anything but walk to…Geesch….

  • Douglas,

    Wow, I’m glad you fought as hard as you did. I have a petition on another site on this blog. Please sign if you get a moment.

    I agree that the LPMI/sold servicing Fannie/Freddie loans are definitely being lost in the mix. The PMI companies are willing to reinsure the loans. We just need to build the PMI in the pricing like they did on your first loan. I don’t understand why it’s so difficult to do this.

    Surprisingly, HARP has been a relative success compared to the other programs they rolled out with tons of participants, but it doesn’t justify how so many homeowners are being left out due to red tape. Clients who had 80/20 100% financing loans can get these loans done just because they chose two have two loans instead of one loan at a higher rate or with PMI.

  • Robert

    Hello Keane,

    I am having fannie mae loan with bank of america. The loan is 110% ltv. I am paying pmi also. Is it possible to do du refi plus with anyone?

  • Robert,

    The PMI is your big hurdle. Only Bank of America is eligible to do this refinance and they’re currently not doing them from. You can call them at and see if they’ve changed their guidelines but I haven’t heard of a company wide change where PMI HARP loans are being accepted.

  • Bob C

    I am currently in a BofA 1st mortgage ARM at 6.50% taken in 8/07 when home was built brand new. Second is a HELOC at the same time with BofA (of course at that time it was Countrywide who carried the loans until the buyout by BofA). We have been current all along and DO NOT have PMI on this loan. The housing market in Utah has been somewhat sheltered from the huge hits to LTV but nevertheless we are of course upside down in our home. Depending on where you look and how much you want to invest in appraisal agents to the tune of $400+ each time you consider a loan, our home has taken a hit of somewhere around 75-150K. and the county aren’t good gauges of value so we are left to guess and wonder what the real value is here. An old proverb says “The value is worth as much as someone is willing to pay for it” and we are not in a position to sell with the equity gone. So is HARP really an option or is this another vanquished venture gone awry with the government stepping in “because they are here to help” and pushing us over the cliff with all the other folks?

  • Bob,

    It sounds like you’re eligible as long as your loan is backed by either Fannie Mae or Freddie Mac. Let me know if you want me to get you in contact with someone at Bank of America to help you.

    You will only be able to refinance the 1st mortgage if it is eligible.

  • Ada

    Dear Keane,

    This continues to be a problem today. Originally HARP only allowed LTV of 105% and when they updated it to 125% in a revision, the lenders did not follow.

    We are also with Bank of America, and have a No Fee Mortgage Plus loan, but it appears that with that loan we have Lender Paid Mortgage Insurance, which they disqualify refinancing in the HARP program. This is a real troublesome situation for us, as we were never disclosed to having any type of PMI with our loan.

    According to the person on the other end of the phone at B of A, only loans with Borrower Paid Mortgage Insurance qualify, so if you have Lender Paid or Paid upfront with a Lump Sum, it disqualifies it with them. Then add on the 105% LTV limit.

    I tried contacting another servicer of HARP, but they cannot touch it with PMI on it…

    I feel like this is one big loop and will not lead to any possibility of refinancing… I have pretty much given up hope at this point.

  • India

    Here is a link to a Home Affordable Refinance Program FAQ (in pdf format) on the Fannie Mae website. I believe it is addressed to lenders, so it is extremely informative about guidelines and requirements to be eligible for the program and appears to be quite current (3/2011). The document definitely cleared up many questions I had.

  • Angie

    I was wondering if there is a cap of refinance charges that can be applied to these harp loans. We are in the middle of a refi (harp loan) Chase is wanting to charge me over $2,600 just in fees not including any prepays or interest on a $111,200 loan balance. Seams a little much for a refi. Any advise would be greatly appreciated.

  • Angie,

    There is a cap. All adjustments cannot exceed 1.75% in fees, which is about the same as .5% more in rate.

    The most common reason why Chase HARP loans may appear expensive is because they have a provision that your payment cannot go up. They often need to buy-down the rate to get your payment lower if you’re coming from an ARM or interest-only loan to a fixed. Please note that this is not required from an outside lender doing a HARP loan but they do need to qualify all of your income/credit.

  • Bob

    My biggest frustration with the HARP program has been the lack of follow up on our loan processing even after several emails and calls. By the time BofA gets around to considering our loan they’ll either be bought out, insolvent or we will have become independently wealthy and paid too much for an overrated overpriced home devalued by the current econimic woes. The banking process appears to the common person to have stalled without any hope of funds being opened up even with socalled stimulus money infused.

  • Bob,

    I know it’s hard to believe, but B of A does make money on processing these loans. It’s in their best interest to close your loan fast and efficiently, although it may not seem that way.

    Remember that there’s more versions of HARP for lenders outside your servicer, so shop it. You may get a better rate and a better experience.

  • Ernesto

    I don’t understand why Bank of America will not let me refinance through HARP becuase of my PMI. I’m not looking to lower my loan or remove my PMI all I want is to refinance my current mortgage to get a lower interest rate. Do I have to stop paying my mortgage and risk ruining my credit before they would be willing to help me? Banks today get away with too much and government needs to do something soon before we all foreclose.

  • Ernesto,

    Only if your trying a modification. I only know of one lender who’s doing PMI HARP loans. Let me know if you want a referral.

  • Jake

    BoA sent me to Fannie Mae to apply for a HARP refi because I have PMI. They swear they can’t do anything about it. If there is another lender out there who will refi my loan with PMI, I’d love a referral!

  • Jake,

    I’ll email you someone. Their limits don’t go to the full limits of HARP but it may work.

  • MT

    I was very interested to find your site and will read your longer post. I spoke to a B of A mortgage representative tonight and, after clear sailing and there being no perceivable obstacles to a HARP refinance, the representative noticed that my second (which falls within the 125% guidelines) was with a DIFFERENT bank. He stopped right there and said, “Our policy changed just a few weeks ago, and we will no longer do a ‘Making Home Affordable’ refinance when the second is held by another bank.” I asked if this meant that if I had called three weeks ago he could do the loan, and he replied, “Yes, I’m so sorry.” I commented that perhaps this was because B of A didn’t want to have to participate in this program and he said, “Perhaps so.” I am beyond frustrated. I went to the HARP page and applied online. Any words of wisdom? Are banks allowed to do whatever they please? (Stupid question, I know…)

  • MT,

    This must be a new policy of B of A’s. HARP does allow for a second mortgage but the processing is harder and longer.

    Let me know what state you’re in and I’ll see if I can find you an outside lender who can do this for you.

  • jesse bloomquist

    I am currently with BOA with PMI and have a second with Wells. Will I be able to do the HARP loan with GMAC or Chase?

  • Robert C

    I have reached the boiling point regarding this program and the total disregard by several lenders including BofA to provide any assistance in the conforming option or HARP. I actually received advice from more than one individual to seek legal assistance in considering such options as short sale and walking away from the house with the value at 60% of original own value. It was mentioned we could actually live inthe house for some time before the Orion to remain would force us out, what does one have to do here to maintain sanity?

  • Keane


    Bank of America won’t do your loan because the 2nd is with another lender. Chase and GMAC will only do PMI loans not serviced by them. What is your value and loan amounts?

  • Josh


    Thanks for your site and the info provided. It’s been very helpful.

    I have a fannie mae backed loan by BoA with lender paid MI. I spoke with BoA two or three months ago and was told they could not refi me with HARP. With the changes in the program announce by Obama today is it possible to do it now with them? Do I have any other options?

  • Bradley

    Have you seen any relief under the extension for those with LPMI? Any cracks appearing in the stonewall??

  • New guidelines for HARP are coming. Here is my most recent post on the matter.

  • Josh,

    It’s possible. If you read the FHFA’s announcement yesterday, they don’t specifically discuss PMI HARP loans in detail but the section regarding “Reduced Lender Warranties” may be helpful in implementing PMI HARP loans. Read my new post on that topic.


    Same answer as Josh’s. I’m hoping these new changes help but it will take some time to find out.

  • MT

    Thanks for all the good info, Keane. I’m in Nevada. I filled out the HARP application online, they called to SAY someone was going to call, but a week later, I’m still waiting for a call. Frustrating, to say the least. Keep up the good work…

  • Rick


    I too have BofA backed by Freddie Mac and LPMI. Let me know if you have success and I will do the same.


  • Josh


    Sounds good. I think I’m going to call them next week, although I don’t expect any change yet. I’ll post what they tell me.


  • JC in Cali

    I am about closing my refinance thru citimortgage under the HARP program and wondering does this program require homeowner to purchase homeowner insurance. I own the condomium and hoa takes care of the fire & earthquake ins. already. The loan processor called and aked if I purchased any homeowner ins. Thanks

  • Keane


    Newer conventional loan guidelines require a HO-6 insurance policy, so the request is not abnormal.

  • Mike Xiao

    Hi Keane, hope you had a good day. I have a loan with Bank of America. The loan is backed by Fannie Mae. It has LPMI. Settlement date: 07-29-2008. Contract sales price: 230,000. Original loan: 195,500. Most current principle: 183,070. The property is in California. I am wondering am I eligible for the HARP 2.0 refinancing? I called BOA last Nov and they said NO because of LPMI. It seems the scenario changed by reading your latest post. Thanks

  • Larry Sauls

    Would love to have any name of a lender who will currently do a HARP refi(FMac) where the loan has pmi through another company.

  • Mike,

    Contact B of A and find out who the PMI company is. This will make a difference on your eligibility. Let me know who it is and I’ll help you find an option.

  • Larry,

    What state are you in? Who do you make your payments to? Also, see if you can find out who the PMI company is.

  • Ada

    We found out our PMI is with GenWorth. Now we are all set to process with a difference servicer in mid-March, instead of trying to go through BofA again. Plus, now we can have the PMI as borrower paid and have it paid down some day.

    Very happy about the latest changes to HARP and finally being able to do this. Should save us a fair amount each month.

  • Robert Charleson

    Keane, we have virtually reached the end of our options regarding our home. We feel frustrated beyond belief and like we have been run through a gauntlet only to come out on the other end severely bruised and nothing at the end. Our loan (originally with Countrywide 8/2007 origination, both first and second)is an ARM at 6.5% for the first and 3.5% variable for the HELOC 2nd. B of A of course took over and of course we have gone through all the hoops of trying to refinance and modify with them to no avail. It seems this company placed a PMI on the back end of the loan(we are not paying a PMI) and this is what has been stopping us from qualifying every time. Yesterday I received a call from Loan Resolution Corporation(LRC) who is the arm of B of A stating we do not qualify for HAFA because we are not 60 days in arrears on our loan.

    We have NEVER missed a payment on our home. Even when the actual institution indicated we should make a reduced payment while being considered for qualification on the various government programs, we had the foresight to maintain the full amount because we did not want to find ourselves having to play catch up and pay the exhorbidant costs associated with late fees in addition to credit score dings and all the fall out on other credit as a result. To this end, we now find ourselves in a house on the market under a SHORT SALE listing and has been reduced over 25% LTV with the likelihood of going even lower to find a buyer with an offer so the bank can determine acceptance of the lower price and waive the remainder of the balance completely from us.

    As painful as this ordeal has been on my family we have come to the realization we are force feeding a long dead horse and are ready for whatever result awaits us regarding this house. No loan agencies will look at a house with a perceived value far under the original signed price. Why would they? I don’t expect handouts or any such favors and have reached the conclusion barring a miracle that we are going to lose our home and will end up starting from square one after a few years have passed and our credit has been repaired.

    I realize we are not alone and there are others out there who have experienced this situation or even worse. My hope is this will provide others with the solace they are not forgotten and we as a people and a nation will recover and rebuild once again. If there are suggestions to somehow make this work I am still open to suggestion yet resolved in the result we have surmised is most likely to occur given the government bureaucracy and unbelievable mess it has created to muddy up the waters.

  • Mike Xiao

    Hi Keane, ‘Radian Guaranty’is the PMI company. Could you please tell me what can I do next to get refinancing? Thanks very much!

    Mike, Contact B of A and find out who the PMI company is. This will make a difference on your eligibility. Let me know who it is and I’ll help you find an option.
    Hi Keane, hope you had a good day. I have a loan with Bank of America. The loan is backed by Fannie Mae. It has LPMI. Settlement date: 07-29-2008. Contract sales price: 230,000. Original loan: 195,500. Most current principle: 183,070. The property is in California. I am wondering am I eligible for the HARP 2.0 refinancing? I called BOA last Nov and they said NO because of LPMI. It seems the scenario changed by reading your latest post. Thanks

  • Mike,

    I think I can find someone who can help you. I’ll email you a contact.

  • Robert,

    I’m sorry to hear that. It’s something I haven’t written specifically about but yes, there are loans that have some sort of insurance to protect the security that does make it ineligible for HARP when the customer isn’t paying mortgage insurance. It’s not common but common enough that it I’ve seen my fair share.

    I pray things will work out for you. Please let me know if there’s any specific advise you think I could help you with.

  • Kirsten

    I have a BOA (Fannie Mae) loan w/ a PMI through CalHFA/Genworth mortgage insurance. I live in CA, bought the house 1/8/08 for $226,000, owe $220,000, house is worth $130,000. BOA continues to to tell me I qualify, but the mortgage ins. company does not participate in the program. I’m told the HARP is a NEW loan, but then BOA says the MI has to remain the same, it isn’t truly new…I spoke with the MI and they don’t seem to have any records of my loan. I can not go with another servicer because of my LTV, any updates with the mortgage insurance and BOA?

  • CarrieAnn

    Hi Keane,

    I like many others here initially started with Countrywide, and then were force moved to B of A. My family and I have tried to refinance under several of the mod programs offered and each time B of A has told us we were not able to due to LTV. Now, with the HARP program we should be eligible. Today, I called B of A again in hopes to get through the HARP process. Our loan is owned by Fannie Mae and they did the DU and found that our insurance carrier is in fact independent and therefore we did meet those two pieces of criteria. They moved us on to the next person. This person then, even before taking any of my information, told me that they are backlogged and unable to even consider anyone for 60 – 90 days. They said once they are caught up they “may” be able to call me back and gave me a reservation number. Of course, after this call,I was extremely frustrated and called Fannie Mae directly, who did confirm we do not have to go through our current lender but can go through other lenders participating in the HARP program with Fannie Mae. My question is,there is such an abundance of information out there, I am not sure which lenders in my area are participating in HARP with the Fannie Mae loans. The property I am speaking of is in Ohio.

    Can you please help to direct me via email with lenders in my area that I can begin to work with? Any assistance would be greatly appreciated!!

  • Carrie Ann,

    I just emailed you a contact at B of A. Good luck!

  • Ryan

    Hi Keane,

    I have a loan for a property in Texas and BOA is saying I am not eligible for a Harp refinance because of LPMI. Property is worth $150k and I owe $142. This is an investment property so I don’t have the equity to do a traditional refinance. Shouldn’t my loan be eligible with the new guidelines? Do you have any contacts I could reach out to in Texas?


  • Ryan,

    I know that BOA will not do LPMI HARP loans at this time. I’ll get you connected with a TX loan officer.

  • Robert Charleson

    Hi Keane,

    We are at wits end. Every program coming out touts the benefits of refinancing and then when we try to move forward we get what virtually everyone else is getting with BofA, sorry you do not qualify due to LPMI. I found out they placed this on the loan with Genworth and for whatever reason they are not allowing this to be accommodated. Seriously, with a house bought at $535k in 2007 and now trying to short sell at $399k and with a 1st ARM mortgage @ 6.5% due to adjust this fall and a 2nd at 3.5% both interest only, why am I even bothering to wage this battle? We have been responsible all through the period and owned up to our debts but this is ridiculous. Might as well walk away, the bank doesn’t give a damn and will get their money and many of us in this position will get the shaft.

  • Ada Conner-Coash

    @Robert – we were in the same position and found that we could proceed with our B of A loan through another servicer, even with the LPMI through GenWorth. We were working with a local bank, People’s Bank of Commerce, and we’re all set to start the process. When you go through a new servicer you can then take over the PMI so it is no longer lender paid. GenWorth did a great job of explaining the options to me and they are more than happy to work with people (not like B of A).

    Our new problem is that I recently lost my job and I am doing contract work, so without proof of income we are on hold again until I get a new job…such a roller coaster ride!

    I am sure the Keane knows someone you can process through, outside of B of A, which is a blessing in and of itself to not be with that bank PERIOD

    Good luck on your adventures to refinancing. I know ours has been an education!

  • Robert,

    Yes, it’s possible I might know somebody who can help. The version of HARP that other lenders can do is different, so I can’t guarantee results but I can do my best to get you a lender.


    I’m sorry to hear about your hardship! Stay strong and hopefully you’ll be working soon and can get your refinance done.

  • Robert Charleson

    Ada, thank you for the insight and as Keane said stay strong, something is bound to result for you.

    I look forward to hearing what is out there. We are located in northern Utah if this helps.

  • Robert,

    Got it. I’ll email you somebody.

  • Priya


    Thank you so much for all this information! I’ve been back and forth with BofA since the beginning of HARP and they refuse to let me refinance because of LPMI. Do you know anyone in PA (philadelphia area) that could help us??


  • Priya,

    I just emailed you a contact. Good luck!

  • Kim

    Chase is saying I do not qualify for HARP because of LPMI. My original loan papers show no evidence of LPMI, FannieMae can’t provide any evidence and Chase can’t either. Also, no one can show me where in the HARP eligibility guidelines it says that LPMI disqualifies me. I have spent 3 hours of my “vacation day” on the phone with 12 different people and haven’t gotten anywhere. I just want to refinance to lock into a 30 year fixed mortgage.

  • Tanya

    I have been slacking off, in following up with all these comments (Keane has some contacts?). I have been in the same situation with Bank of America since 2011, if not late 2010… No luck with refinance b/c I ‘apparently’ have LPMI. Now with the new Harp, same thing again, after reporting them to Attorney General’s office. I spoke to a BOA loan officer around mid May 2012, and as recent as it was, they said ‘BOA is looking to include people with PMI, eligible for HARP program. I have not received a call yet, stating they ‘have’ changed their rules. BOA is just stalling people to the point that the HARP program is going to end and then they’ll have another excuse to not refinance us.
    What can I do? Keane, do you have a contact? I am in New Jersey.

  • Josh

    Kim and Tanya — I’m in the same boat with BOA. With the latest HARP changes you can refi through another lender. They key is to get your LPMI insurer to change the PMI to Borrower Paid MI. My insurer, Radian, changed mine no problem. My refi should close in the next few weeks. I would suggest a good mortgage broker. There is hope.

  • Ada

    Kim, Tanya and Josh,

    I went through the same thing with BofA. Took forever to figure out that my LPMI was with GenWorth. One very helpful BofA rep on the phone was able to discover it. Once I had that I was able to call GenWorth and get the details on it. BofA owns the PMI, but it gets held against you in this re-fi option. Your best bet is to process the HARP re-fi with a different Bank/Servicer. We were all setup to go through People’s Bank of Commerce, which is a local bank, but then ran into job changes which delayed the process once again.

    LPMI should not be an issue with you refinancing, but your current bank will put up their own policies on top of HARPs to disqualify you. Look into other banks in your area that have good reputations and ask them if they are processing HARP loans. With the new guidelines it does NOT have to be with your same current provider.

    Best of luck to you all!!

  • Kim

    I found another lender that may do the refinance for me but it will cost $3,000 and my rate will be a full percentage higher because I am upside down on my mortgage. Is this the best I can hope for?

  • Ada


    I think ultimately it will “cost” you some money, but nothing upfront. For us it was going to be included in the re-financed loan, so no money out of pocket…If the rate is higher I am not sure how you would save money be refinancing, so it just doesn’t sound right to me. I would be cautious with them. Try some other lender options.

  • Hello all!

    First, Josh and Ada’s info is all right. It was VERY hard to find LPMI lenders in the past. However, it’s easier now. Many lenders can do this for you and if you like, I can still refer others.

    Kim to discuss your “cost”, remember that this is a regular refinance. In fact, be MORE careful of the “no-cost” HARP refinance. Every loan has costs. To get “no-cost” loans, you must take a higher rate. I would calculate your estimated length of ownership and choose how much you want to pay in fees to get a lower rate. Here’s a post I wrote specifically on the topic:

  • Ada

    I just wanted to share our latest good news since it should give many of you good hope in this HARP process. I finally got a new job that I will be starting at the beginning of July. Since I will return to a permanent employment status, we are able to proceed once again on our refinance process. Here is a summary of where we are coming from:
    Our loan is currently with Bank of America, the product of their No Fee Mortgage Plus Program, which we received in December of 2007. Like everyone else in this program, as well as others with other lending companies, it comes with Lender Paid Mortgage Insurance (LPMI).
    Since the recent HARP modifications we were unable to do anything with this loan because of it. Now thanks to the latest revisions introduced in March 2012 we are now on our way to refinance through a different servicer.
    We are working with a local bank, People’s Bank of Commerce, who currently has two investors; Quicken and Century. They have been fabulous to work with, unlike B of A.
    Today when I dropped off our paperwork to get the loan process started, as we should be able to close at the end of July (30 days of being in my new job), I found out that out LPMI will be treated as Paid Upfront Mortgage Insurance and will NOT transfer to the new loan per GenWorth who holds the MI Certificate. This is great news, as it means we will be saving even more every month then we originally hoped.
    Of course with how this process has gone so far I am not yet ready to hold my breath, but things finally seem to be looking up! It was a glimpse of great news, best yet through this whole process, and thought it was worth sharing.
    I will keep you all posted as to how this thing finally closes and wish you all the best of luck on yours!

  • Ada,

    Great research on your loan. Genworth is easier to work with than other PMI companies and you should hopefully be get this loan done soon.

  • Tanya

    That is a great step for sure. I am happy that things are looking up. My LPMI is through Genworth. There are other companies out there, and one or two other companies willing to help, even with LPMI and Loan to home (house or condo) value over 125%, with a loan owned by Freddie Mac or Fannie Mae. This website is specific to freddiemac:
    The catch, esp. with a L to H value over 125% and a condo, is that it has to be your primary residence. So, even if you decided to rent it, to help your situation and not lose your home in the short term, proof of paying some bill is important.

    I am still trying, difficult for the warning factor I mentioned above(my place is being rented temporarily, though I have not bought another place or paying rent – moved back with parents – it’s still considered non-primary residence and an investment property. Also, the rent doesn’t even cover the mortgage, which doesn’t include the HOA fees). Everyone just has to keep trying, and look at different/other mortgage servicers. I hope we succeed, to remove our business, especially from Bank of America.

  • Carri

    I was in contact with my BOA rep, who said I did qualify under the HARP program, but they would not touch my second mortgage. I believe that if I go with a new lender I will be able to combine the two into one mortgage and therefore reducing overall to a lower rate. My husband and I have been trying to sell the house to move into something closer to where we work (gotta love gas prices and crossing three counties just to get to work each day!) and are considering doing the refinance and then renting the home so we are still able to go out and take advantage on the rates for what would be our new primary home.

    My question is – what other lenders are recommended besides BOA (my current lender) for a Fannie Mae loan, where people have actually had good experiences. Any recommendations would be greatly appreciated.

  • Tanya,

    It’s tough to get that high of a loan-to-value approved through Freddie Mac’s loan prospector program on a rental/condo. Doing a shorter term loan may improve your odds.

    Even though you want to move away from BOA, they may be able to do this now that the Same-Servicer program allows conversion from Primary to Rental. Let me know if you want me to connect you to a BOA rep.

  • Carri,

    Most of the experience you’ll get will be based on the loan officer you’re working with. Fannie Mae loans are easier to work with than Freddie Mac.

    No HARP lender will wrap your 2nd mortgage in the refinance because the program doesn’t allow for it, but you can likely keep the second mortgage.

    If you want a referral, feel free to email me the state you’re in and I’d be happy to pass along a name.

  • Ada

    It’s almost the end of September and we are finally getting ready to close. Everything is in underwriting. What a long process this has been! We had a few hold ups, as usual. Had to get an appraisal done, as the investor would not accept anything over 125% LTV. Great news for us is we barely made the mark, but we made it!
    Now it is just paperwork back and forth, but it is still good to go, just a matter of time.
    Not the end of July as we had hoped! But still getting there. Hoping for next week to finalize closing.

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