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