Homeowner’s Guide to HARP

House MedicineIt appears that more homeowners with little-to-no-equity are gaining an interest in refinancing.  More importantly, they’re gaining confidence that there is an option.  This is good news as it appears the Home Affordable Refinance Program (HARP) is gaining both momentum and attention.


This seems like the right time to give homeowners an extensive guide to HARP, including who it best benefits, how to give homeowners the best shot of getting approved as well as other options to low-equity refinancing.


To clarify one fact about HARP that many homeowners do not know, YOU DO NOT NEED TO USE YOUR CURRENT LENDER TO GET A HARP LOAN.  Shop your HARP loan like any other refinance.  The only exception to that rule is if your current loan has PMI, which can only be refinanced through your current lender at the moment.  Even then, a very small handful of lenders will do a HARP loan with PMI.  Also, HARP is not limited to homeowners only.  You can use HARP on 2nd homes and investment properties as long as the loans are owned by Fannie Mae or Freddie Mac.  In fact, they are actually perfect for investment properties.  You can read more on this topic here.  This contradicts the Making Home Affordable website, which states you may be eligible for HARP if “Own a one- to four-unit home that is your primary residence.”  I can tell you from first hand experience that you can use HARP on 2nd homes and rental properties.


From my experience, the loan pricing offered from current servicers is often higher than from a new HARP lender.   However, there are times the current servicer can offer a version of HARP that no other lender can.  This can include no income verification or appraisal, which can be very helpful for some homeowners who feel they’ll have issues qualifying.  Remember that other HARP lenders can loan on underwater mortgages, but if you think your home will appraise for less than what’s needed for HARP, using your existing servicer may be worth it even if they are charging a premium for the loan.  If you think you’ll fit within income and equity requirements for the HARP lender you’re talking to, shop your loan like a regular mortgage.


One unfortunate fact is some loan servicers do not originate new loans.  If your loan was sold to a company like Cenlar or Seterus (added 10/25/2011), then the special HARP options (such as PMI HARP loans) will be unavailable to you unless you find a specialized lender who participates in PMI HARP Loans.  This is because companies like Cenlar do not originate new loans, they only service the payments.  Email me if you want a referral.


Large banks also only offer HARP loans for the loans they service.  If you bank with Bank of America and have a Cenlar serviced loan, Bank of America can’t help you.  Look for a Fannie Mae or Freddie Mac lender who does HARP loans in your area.


The HARP program was designed to help homeowners who are looking to refinance but have lost some to all of their equity in their home.  It only applies to homeowners who currently have a Fannie Mae or Freddie Mac owned loan, but that does not mean HARP is a homeowners only choice.  In fact, there’s surprisingly several opti0ns available to homeowners that may not have considered, nor did their lender give as an option.  In this post, I will cover who qualifies for a HARP refinance, who best benefits from HARP guidelines, which customers do not qualify for HARP and some alternatives to consider.  One EXTREMELY important detail to note is you cannot refinance under HARP if you have already applied for a modification (HAMP-Home Affordable Modification Program.  If you haven’t decided which is better for you, apply for a HARP refinance first.  If your HARP refinance application is turned down, you can proceed with a modification application.  Attempting to modify your loan first will disqualify you from a HARP refinance.



One topic that is very confusing for homeowners is finding out who really owns their loan.  You think it would be as simple as looking at the name on your mortgage statement, right?  Not so.  In fact, it’s very rare for a loan to be truly owned by the company you make your payments to.  Lenders usually sell their loans to another entity.  They also will collect payments in behalf  of that entity which is called “Servicing.”


Let’s suppose you buy your house using Wells Fargo as your lender.  Wells Fargo then sells your loan to Freddie Mac.  Wells Fargo still collects your payments and passes the payments back to Freddie Mac while collecting a small fee for the service.  In this scenario, your loan is owned by Freddie Mac but Wells Fargo is your servicer.


There are several steps you can take to find out if Fannie Mae or Freddie Mac owns your loan.  It’s vital to try all options before you give up because not all methods work the first time.


The first place to check to see if either Fannie Mae or Freddie Mac owns your mortgage is an online property lookup tool


Fannie Mae’s lookup tool:


Freddie Mac’s lookup tool:



If your property does not show up on either of the property lookup tools, you should still call Fannie Mae or Freddie Mac to see if they own your mortgage.  Fannie Mae and Freddie Mac do not always have the exact address saved correctly.  This is why it’s important to call.


Fannie Mae’s phone number:

1-800-732-6643 or 1-800-7-FANNIE

Freddie  Mac’s phone number:

1-800-373-3343 or 1-800-Freddie


If you don’t have luck there, contact your current servicer and see if they know if you have a Fannie Mae or Freddie Mac loan.  Lastly, you can have the mortgage company you’re applying a HARP loan from run an automated approval through Fannie Mae’s Desktop Underwriter or Freddie Mac’s Loan Prospector software and it may indicate if the property qualifies for a HARP loan.



First, find out if your current loan has mortgage insurance.  As it stands now, HARP guidelines require that you work only with your current servicer if your loan has mortgage insurance.  However I have not heard of one servicer who will do this loan.  This topic was covered in my blog post, “Another Flaw With the HARP Program.”


HARP guidelines say a homeowner can finance up to 125% of their home value.  Most lenders are still following the original guidelines of 105% but a couple of lenders are beginning to finance up to 125%.  Both of these limits are for a first mortgage.  Currently, HARP guidelines do not have a limit to how high your combined-loan-to-value (CLTV) is which means if you have more than one loan, the total amount you owe against your house is not considered in the qualifications of a HARP loan as long as the first mortgage is in the 125% allowable range.


UPDATE 10/25/2011

The Federal Housing Finance Agency released new changes coming to HARP which include loans over 125% and extending the program until the end of 2013.  They are also removing some lender warranties, which will encourage more lenders to participate in riskier HARP loans such as PMI insured HARP loans and loans with higher loan-to-values.  You can read more about these changes on a new blog post I wrote here.


Even though Fannie Mae and Freddie Mac both allow above 100% financing, please note that the loan pricing is more expensive.  HARP loan pricing is best suited for 95% combined-loan-to-value or less meaning you’ll get your best rates and fees if you have at least 5% equity between all loans owed against the house.  Pricing is increased between 95.01-97% and increased again for anything above 97.01%.  This means you’ll want to be very careful of how much you borrower on your house if your loan amount is near the value of your home.   If your current Fannie Mae or Freddie Mac loan does not have mortgage insurance, you will not be required to get mortgage insurance on your new HARP loan.  This is one of the major benefits of doing a HARP refinance.


These programs are also very credit score driven.  Best pricing is for homeowners with a 720 credit score or higher. You can answer a quick 4 question eligibility test on the HARP website here.


Here is a quick summary of the HARP loan requirements:

  • your loan will need to be owned by Fannie Mae or Freddie Mac
  • your current loan should not have mortgage insurance (you can contact your current servicer per guidelines but I have not heard of one servicer who will do this yet).
  • you can go as high as 105% of your home value with most HARP lenders and 125% with a few lenders but preferably be at 95% or lower for best pricing.

UPDATED May 29th, 2010-

There have been two major hurdles on HARP loans that appears to be much easier to overcome.  One, many HARP lenders are now implementing price caps.  What does that mean?  Simply this…it doesn’t matter how bad your refinance situation looks, you’ll never pay more than “X” over the best interest rate that lender has to offer.  Lower credit, condo, investment property or second home, you will not have to pay the huge premiums that HARP loans had last year.  Not all lenders implement a price cap, so it’s important to shop your loan.  Remember when I said you do NOT HAVE TO USE YOUR CURRENT LENDER?  I can’t stress this enough.  Most of the rates/fees I’m seeing from current lenders are much higher.  I have a feeling that most of these lenders know that their current customers check with them first, so they build large premiums in their pricing.  Dont’ pay too much for your loan…be sure to shop it around!


Two, if you once applied for a HARP loan and was denied because you have a second mortgage that would not allow you to refinance your first mortgage (called a subordination agreement), many lenders have worked with the government and are now allowing subordination.  Below is a list of lenders who I’ve been able to get the subordinations approved with relative ease even though the loan amounts exceeded 100% of the home value:

  • Bank of America
  • Wells Fargo
  • Chase
  • GMAC
  • Citibank
  • Flagstar
  • Everbank
  • Key Bank

UPDATED June 17th, 2010-

It’s important to know that HARP is only eligible for loans that were purchased by Fannie Mae by March 1st, 2009 and May 31st, 2009 for Freddie Mac according to a source.  A colleague of mine (Rhonda Porter at Mortgage Master Services) recently worked with a client who originated a loan LONG before March 1st, 2009 but Fannie Mae did not securitize (or purchase) the loan from the lender until after this date.  This made the loan ineligible for a HARP refinance.  Here is an excerpt of her blog post here:

We also need to eliminate the securitization factors of when Fannie or Freddie bought the existing mortgage for it to be eligible for a HARP refi.  I recently had a client where it showed on Fannie Mae’s site that he indeed has a mortgage owned by Fannie Mae–it was not until we received an error message trying to underwrite it through DU (the automated underwriting system) that we called Fannie Mae to discover that the loan had been securitized (purchased by Fannie Mae) one day too late to qualify (March 1, 2009).  This person’s loan closed in December 2008, was sold the the bank and then took months for Fannie Mae to purchase.  This means this upside-down home owner does not qualify to reduce his payment by $250 per month.  Imagine what the $250 a month would do for him and/or the economy.  It gives him some probably needed monthly financial wiggle room and he just might spend a little more which helps our economy too.

To read more, CLICK HERE



UPDATED 7/16/2011

If your lender says your loan is backed by Fannie Mae but you’re not eligible for HARP, here’s the instructions to see if your loan was purchased by Fannie Mae during the eligible time frame for HARP.

  1. Tell your lender who’s applying for the HARP loan for you to have their Fannie Mae seller ID, Desktop Underwriter findings, case number and Desktop ID number.  You may not know what this is but your lender should.
  2. Have them call 877-722-6757
  3. Ask the representative to “verify the address in the servicing database” to ensure the address is correct and ask if the loan is eligible for a DU Refi Plus



HARP guidelines state you can refinance if your loan has PMI but that’s rarely true.  Only direct lenders who service your loan can do these and even then, very few will.  I referred a very close family friend back to Bank of America hoping they could help him with his PMI loan serviced by BOA, but no luck.  I wrote about this event HERE.

I started a small list of lenders who do refinance HARP loans with PMI.  You can find that list HERE.




Surprisingly, there are some great options available if you do not qualify for a HARP loan or you don’t like the pricing.


A great alternative for the general public is FHA.  FHA allows up to 97.15-97.75%(depending on your area) of the home to be financed.  What makes FHA special is they do not have a limit for combined loans AND there are no negative pricing adjustments if the 2nd mortgage exceeds 100% like HARP loans.  Let’s suppose you have one loan at 95% of the home value and a second mortgage equal to 15% of the home value.  The two loans together equal 110% of the home value.  You then can pay off just the first mortgage with a FHA loan and keep the second mortgage above 100% of your value.  More importantly, FHA has much lower credit score requirements, the previous loan does not need to be a Fannie Mae or Freddie Mac loan and it doesn’t matter if the loan being paid off has mortgage insurance.  The only caveat is that all FHA 30 year loans require mortgage insurance.


My favorite option using FHA  is their 15 year mortgage.  FHA allows a homeowner to finance up to 90% of their home on a FHA 15 year loan with NO MORTGAGE INSURANCE.  The same guidelines regarding combined value and credit apply as above.


Let’s say I have a homeowner who is interested in a 15 year fixed loan and no equity.  They have a loan equal to 85% of their home value and a second mortgage equal to 25% of their home value for a total value of 110%.  They can refinance on a FHA 15 year loan and payoff the first mortgage and keep the remaining second mortgage.  They do not pay mortgage insurance on the first mortgage and there are no pricing adjustments for the 2nd mortgage exceeding 100%.  Yes, 15 year loans have a higher payment since the pay off is faster, but between the lower rate of a 15 year loan and the removal of mortgage insurance, much of the payment increase is covered.  Plus this loan will pay down the borrower’s balance faster helping the homeowner gain their lost equity back.


Second, military veteran’s should find out if they can finance their new refinance with a VA(Veteran’s Affairs) loan. In October of 2008, the department of Veterans Affairs opened up the guidelines for veteran’s to allow them to refinance higher loan amounts and up to 100% of their home value when paying off an existing non-VA loan. This is a huge improvement to previous guidelines which only allowed up to 90% of the home value with a maximum loan amount of $144,000. However, the VA does not allow the loans to exceed 100% of the value under any circumstances. If you have two loans and they equal above the value of your home, you cannot do a VA loan.


To recap, here is a summary of when you would want to consider government loan programs:

  • For veteran’s who owe up to 100% but not over 100% of their value, VA is a great loan option
  • Homeowners who owe up to 97% of their first mortgage and have a second mortgage above 97% should consider a FHA loan.  If the homeowner’s first mortgage is not a Fannie Mae or Freddie Mac loan, FHA will likely be their only option.
  • Any homeowner who has little equity and does not have a loan owned by Fannie Mae or Freddie Mac should consider a FHA loan.
  • FHA 15 year loans do not require mortgage insurance as long as the FHA loan is at 90% of the home value or less REGARDLESS of the 2nd mortgage balance and combined loan-to-value.

UPDATE 9-1-2010

New FHA guidelines will no longer allow financing with second mortgages exceeding 100% of the home value.  All FHA applications dated after September 7th, 2010 will be subject to these new guidelines.  Read more about how this affects homeowners who are applying for a refinance with a second mortgage here:




For the most part, homeowners are limited to the loan products above.  However, that does not mean they do not have other options.  Whether a homeowner needs a little more equity to qualify for any of the loan options above or to improve their loan pricing, they may consider getting another loan somewhere else to cover the cost.


One suggestion I’ve given clients that has helped is getting a 401k loan.  401k loans are loans taken against a  person’s retirement plan.  It’s not a withdrawal of retirement funds, so the person does not pay tax or penalty costs for the loan.  In many cases, the interest the person pays on a 401k loan is actually used to fund their retirement account which means they’re paying interest to themselves.


On a Fannie Mae HARP refinance (DU Refi Plus), the additional cost from a 95% loan-to-value loan to a 97.01+% loan is a 1.75% fee.  This means if your appraisal shows you have 2.99% equity or less, you have to pay a 1.75% fee or higher rate compared to someone that had 5% equity.  If you could get a small 401k loan to cover the difference, it may be worth your while.  On a $200,000 loan amount, a 1.75% fee is $3,500!  Borrowing $4,000 (2%) more in equity that you will pay yourself back to save a $3,500 fee you will never get back is a great money-saving solution.



If you are looking to do a HARP refinance and currently have a fixed mortgage through Freddie Mac, you cannot do an Open Access Freddie Mac HARP refinance to an adjustable rate.  You can only refinance to another fixed loan.



The HARP program was set to expire on June 10th, 2010.  The program was extended and now is set to expire on June 30th, 2011, approximately one year later.  News of this extension can be found here.



FHA just announced that they will be rolling out a new program to help underwater homeowners.  This was announced along with some updates to the HAMP program.



HUD released a press release regarding this program:

HUD No. 10-173Brian Sullivan
(202) 708-0685

August 6, 2010
Effort designed to encourage principal write-downs for responsible borrowers
WASHINGTON – In an effort to help responsible homeowners who owe more on their mortgage than the value of their property, the U.S. Department of Housing and Urban Development today provided details on the adjustment to its refinance program which was announced earlier this year that will enable lenders to provide additional refinancing options to homeowners who owe more than their home is worth. Starting September 7, 2010, the Federal Housing Administration (FHA) will offer certain ‘underwater’ non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least ten percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage.


The actual guidelines for FHA were also released on HUD’s Mortgagee Letter 2010-23.  Lender use mortgagee lenders as their guideline to originate FHA loans, which means that lenders should be approving these mortgages now.  What I found that was interesting is that existing FHA guidelines technically already allowed these types of refinances.  The limit on the second lien mortgage is actually a cap that used to not exist on FHA financing.


The mortgagee letter does begin to illustrate the benefit the second lien holders will receive for taking reduced payoffs.  The letter indicates each servicer will receive $500 and incentives based on combined-loan-to-value.


Existing second mortgage lien servicers will be entitled to a one time incentive of $500 for each successful closing. Existing second mortgage lien investors will be entitled to an incentive based on the combined loan to value of the existing lien and all senior liens associated with the mortgage. The actual incentive pay-out schedule and more information on this program will be available at www.hmpadmin.com.


The announcement states that the program will begin September 7th.


I’ve studied the material for this new program and surprisingly, it’s not that different than a regular FHA loan.  The difference is the government is giving incentives to the homeowners existing lenders to write down their loan balances, thus allowing the borrower to qualify for a new FHA loan.  Here are the requirements:

  • The new FHA loan can be as high as 97.75% of the homes value
  • The homeowners existing loans cannot be a FHA loan
  • For the existing lender to qualify for government incentives, the first mortgage must require at least a 10% write-down from the original balance of the first mortgage
  • The government is also giving incentives to second lien lenders as well.  They will give them incentives to write-down their balances so the combined value of the first and second mortgage do not exceed115% of the home value.  As you’ve seen from my original posting regarding FHA loans, FHA allows second mortgage companies to have an infinite value over the value of the home as long as the FHA first mortgage is at 97.75% or less.  This is one difference between this program versus a regular FHA loan.
  • The refinance is voluntary, so both the homeowner must agree to the refinance terms and the existing lenders must agree to the write-down of their loan balance.
  • The homeowner cannot be late on their mortgage payments
  • The homeowner must occupy the property
  • The minimum credit score for this program is 500 (Though I doubt lenders will fund new FHA loans with a score this low)
  • The total house payment, including the payment of a second mortgage, must be no greater than approximately 31% of the homeowners gross income.  Further, the total household debt cannot exceed approximately 50%.  (I love how they use “Approximately” in the definition).


They key to this program is that the government is INCENTIVIZING lenders to write-down their loans.  What does this really mean?  The lender writes off the balance of the loan exceeding 97.75% of the homes value and the government will give them money to help recoup the losses.  It’s for homeowners who have paid their mortgage on time, so it’s right in-line with HARP clients.  There are two major differences.  When a homeowner refinances on this program, they will owe less on their house thanks to Uncle Sam.  Also, they can refinance to a low 30-year fixed rate regardless of what kind of loan they have.   This may end up being the solution for homeowners who have loans with mortgage insurance.


There are many details that still need to be answered.  FHA currently has loan limits depending on the county.  Will these loan limits remain?  My guess is they will, so be sure to check your local FHA loan limit here.  They have not said who can originate these loans yet either.  I hope that they have learned from their mistakes with HARP and allow any lender to originate the new loan.  HARP loans with mortgage insurance required homeowners to work with their existing lender, yet none of the major banks who participated in HARP have begun refinancing homes with mortgage insurance.


If this program is available to all FHA lenders, this has the potential to be a big success.  However, there are many obstacles to overcome.  First, every lender will need ample time to service the write-down requests and the origination of the new loans.  At the time of this update, HARP has available for approximately a year, yet many lenders are still giving homeowners difficulty.  If this program has an expiration date of anything less than 2 years, it will have little impact on our housing market.  Except, of course, if the government extends it (that tends to be norm these days).


This brings up two questions.  When will lenders start offering this program and what incentives are given to the lender from the government?  The “Frequently Asked Questions”of this program state the program will be rolled out immediately and will hopefully be in affect this fall.  I will be researching to find out what the incentives are for the lender.  If the incentves are minimal, this program will fail.  If the incentives are too large, it raises the question, “Who’s paying for this?”  I believe all of us can answer that question.


For lenders, it sounds like we’ll be wearing two hats.  Originating a new FHA loan and negotiating a principal balance write-down with the current lenders.  I’m interested in seeing how this plays out.


Be sure to revisit this blog post for any updates.



I confirmed with HUD (The Department of Urban and Housing Development) that FHA will insure these refinances regardless of the new lender.  This means consumers can competitively shop a FHA refinance for a reduced balance payoff.  The program is fairly straight forward and easy enough that we should see some success.  That said, HARP is a very straight forward program but I hear horror stories almost daily, so like HARP, I don’t expect all lenders to execute these well.


The unique twist to these refinances that will hold up many refinances from closing is the negotiations with the existing lenders.  Lenders and loan officers are having a hard enough time closing the loans.  Negotiating an existing lender to take a lesser amount opens up the chance for increased liability and error.  I believe the most successful lenders will likely be working with attorneys who will handle these negotiations similar to loan modifications and short sales.  I’ve already begun speaking with attorneys who specialize in these services to see what they’re opinion is of this program.  Stay tuned for updates.


Although FHA guidelines allow for these refinances, many lenders will not close these loans.  If you’re looking for a refinance of this type, be sure to find a lender who can do this loan first, then see if there’s a loan officer at the firm who has experience with these transactions.  They’re new, so don’t expect great results if you’re an early adopter.  I will provide updates of my experiences and post lists of lenders and loan types I’ve had success with.  Follow this post in the future for these updates.


For FHA to insure a refinance with a short payoff, the borrower must prove

  • There is insufficient equity in the home based on it’s current appraised value AND/OR
  • The borrower has experienced a reduction in income and does not have the capacity to repay the existing indebtedness against the property.

Unlike short sales and loan modifications, the borrower will not be asked to slow pay their mortgage  to qualify.  FHA allows a couple of late payments but nothing more than 2x 30-day late payments in the last year and the loan cannot currently be late.



The deadline for HARP loans has been extended until June 30th, 2012 (1-year).


543 comments to Homeowner’s Guide to HARP
  • Quick Update, if you are having troubles getting the second mortgage companies to subordinate on your HARP refinance, be sure your lender is sending the request stating it’s for a DU Refinance Plus for Fannie HARP loans and Open Access for Freddie HARP refinances. I just learned that many lenders, including B of A, are more likely to do the subordination if that is stated on the request.

  • Darci

    Wells Fargo does HARP refi’s with mortgage insurance.

  • Darci,

    That’s great news! After hearing of dozens of horror stories, this is the first I’ve heard of this.

    Was this your refinance?

  • mortgagebubble07

    hey guys, I like many others bought a house in the last 5 years and now am stuck with a home that I owe quite more than its worth. Im going through a loan modification at the time and used this mod guide I found at http://www.modifyingmadeeasy.com. The guide only cost me 19.95 and has helped me understand the process I’m going through. I recommend to all, best of luck.

  • Randi,

    I haven’t heard of anybody doing mods on VA loans. I think the VA is resistent to modifying their loans because their streamline guidelines are so light. Most mods being done are short-term modifications which are similar to VA 5/1 ARM’s with a fixed 5-year initial period and 1% increase each year after (the max adjustment on VA ARM’s is 1% after the 5th year on certain VA ARM’s).

  • Kathryn Rude

    Thank you for the information BUT once again I find myself unable to refinace due to 2 circumstances: 1) My cresit score is only 680 and 2) I have a freddie mac loan with 300/month PMI that banks are NOT refinancing. I feel totally trapped!! I cannot wite off the PMI because the house was purchased approx 1 week before the law came into effect that I could write it off, Dec 15th, 2006. I cuurently throw 301/month out the window!! Needless to say I am trapped in a mortgage that is way TOO high-2,425/month for a 272, 000 house. ANY advice would be helpful. Thank You!!!


    Who is your servicer? Also, how much do you think your house is worth? According to another person who commented here, Wells IS doing HARP loans with PMI. Also, maybe FHA could work. Let me know what your approximate value is and let’s see what we can do.


  • Kathryn Rude

    My lender is BOA, I owe 272,000. I recently had it appraised at 340,000 FHA through a private broker. However, a semi-comprable house down the street just sold for 241. However, we have put over 25,000 in updates into this house over the past 3 yrs. From what I understand, I cannot utilize another lender like wells fargo for a BOA loan.


    If you have an appraisal done and it’s a FHA appraisal for that amount, you’re good. The recent sale could affect value but details of that sale would need to be considered before including. You only need a value around $285k-290k to make a FHA loan work. I think that is your solution.


  • Avinash

    I have been struggling to get Bank of America to refinance my loan under HARP program, but they refuse it because of LPMI. I am really perplexed since Wells is doing it however Bank of America is getting away scott free and they have the odacity of giving ads in the TV which show them as taking care of their customers and american people.

    They refuse to do it even if teh guidelines of DUrefi Plus clearly permit such refinancing

    How do we get our voices heard



    This is exactly what I blogged about on my “Another Flaw with the HARP program”. As consumers become more interested in a HARP refinance, more of them will become very angry when they learn the largest bank in America will not do their refinance even though it fits guidelines.

    At the moment, there’s still nothing you can do. Did you read the other options in this blog? Can you maybe move to a FHA loan?


  • Ken Schoniger


    I have a 30 year fixed 5.875% mortgage with a 40% LTV that I wish to refinance at a lower rate. The home is currently occupied by caretaker/tenants while we are on an extended stay with our children but we expect to return to our home during the next two years or before. We have heard that Freddy/Fannie will not allow the refinance of non owner occupied single family tenants but this make no sense to us at all. The house is on 12 acres on a moutain top. surely it is in Freddy/Fanny’s best interest to have it occupied. what can we do?


    Your scenario sounds 100% acceptable. The caretakers do not make your property non-owner occupied. It is your home and will remain your home. At worse, a lender may want you to refinance this is a non-owner occupied home which has a price adjustment, but from what you’ve shared, this wouldn’t be necessary. I’ve done refinances for soldiers who let their family stay in their home while they’re away. It doesn’t change the fact it’s your home that you live in. The caretakers would need to be aware of the refinance and let the appraiser in to visit the home. Other than that, it’s fine.


  • Steve and Dawn


    Here is our story. We bought our house in 1998 at $157,000. We refinanced and our current mortgage is $166,000 at 6.25%. Everything was going fine until the recession hit and my husband was laid off in Feb. 2009. We have managed to keep our house payments current and in doing so we now have about $10,000 in credit card debt. It looks as if it may be another few months before work is available again. We were denied the modification program and just recently inquired about the HARP program. We were denied that as well due to our credit score. I am going to inquire about the FHA loan tomorrow, do you have any other advice for us if we are turned down for that as well. We really don’t want to become delinquent on our mortgage payments, but we are really getting scared that might happen. What can we do, we have never missed our payments in the past, but one of the reasons our credit score has suffered is that we have focused on our mortgage and only paid bills such as our utilities a certain amount a month. We always make a payment to them, just not the full payment. Any advice? Thank you very much.
    Steve and Dawn

    Steve and Dawn,

    I can tell you two are doing what you can.

    FHA loans do allow a more lenient credit score than HARP loans do. What is the estimated value of your home? That will help with finding out.

    I wouldn’t give up on the modification option either. We are finally starting to see reputable companies who will help homeowners modify their loan terms. I wouldn’t give up on that yet.


  • Christian

    If you qualify for a HARP refinance of the first mortgage can you refinance the second with the second mortgage holder under the program? If not can you attempt to refinance the second mortgage? Thank you.

    The HARP program is only for refinancing Fannie Mae and Freddie Mac loans on a rate/term refinance. I believe there was a time that Freddie Mac actually offered both the first and second mortgage, but I may be wrong. Almost every Fannie Mae and Freddie Mac loan is a first mortgage, so likely no, you cannot refinance the 2nd on a HARP.

    You can refinance the 2nd separately but if you’re above 100% value, nobody will likely do it.


  • Sandy

    We have been trying to refinance our home since December 2008 with Wells Fargo. Built our home in 2001. We have our 1st with Wells $289,000 and a 2nd also at Wells for $250,000. Our home appraised at $534,000 in 2009. We have numerous complaints about the appraisal (said we had a wood fence when it is a block fence, home is custom blueprinted not stated, and the list goes on and on)is there an agency to lodge a complaint against the appraiser? His appraisal is causing the problems with our loan. Our neighbors home just sold for $599,000 and is smaller sq feet, less custom, etc. than ours. Wells Fargo is now suggesting that we do a HARP loan to refi? Any suggestions we are just trying to get a lower rate?

  • Sandy,

    You can try to do a HARP refinance. Remember that FHA loans allow for above 100% value on two loans combined. There’s also no price adjustments like HARP loans. You do have to pay mortgage insurance on a 30 year loan but you don’t on a 15 year loan up to 90% of the home value.

    I’m doing a FHA refinance for somebody right now up to 90% on a first mortgage (15 year) and keeping the second over 100% of the value. It’s nice because we’re paying off as much of the 2nd mortgage as we can up to 90%, which you can’t do on a HARP.

    I would heavily consider a FHA loan depending on the rates you have on your current loans.

  • One more tip for everyone out there:

    HARP loan guidelines can be very helpful in obtaining high loan-to-value financing but every appraisal is still subject to an appraisal desk review by the lender.

    The new Home Value Code of Conduct (HVCC) rules followed by Fannie Mae and Freddie Mac make it less likely that you will have to deal with an appraisal review adjustment, but it is still possible. Especially if your property is very unique compared to homes in your market.

  • Donna

    We are trying to refinance through HARP. Our loan is through Chase, it is our primary home and we do not have a 2nd mortgage on it. Our loan is owned by Fannie Mae, we do not have PMI on it. We have excellent credit score and a LTV of 92%. We are being told by Chase that while we met the HARP and Fannie Mae requirements they will not refinance because our home is a condominium. We live in NYC. We have tried through other banks (BoA, Citibank, HSBC) and they have told use they will not do a HARP refinance for another bank.

    Any advice?


  • Donna,

    Any HARP lender SHOULD be able to do your loan. It’s a lenders choice if they don’t want to do a condo.

    If you keep your new loan at 95% of your new value after you roll in closing costs, you will get the most ideal HARP pricing.

    Feel free to contact me. I can give you some tips on finding a good HARP lender if you wish.


  • MS


    My current (only 1st mortgage) loan is with CITI and it is a Freddie loan. CITI would not re-fi under the HARP 125% LTV program due to some technical issues.
    I found a local Credit Union that said they could do my loan as an ‘OPEN ACCESS’ with upto 125% LTV. Everything was progressing till today when my current Insurer said that for OPEN ACCESS they (MGIC) support only 105% LTV… IF it is the same servicer then MGIC would write Loan upto 125% LTV. I am currently at avery high interest rate (7.5%) Please help,

    Regards, – MS

  • MS,

    I think you’re getting false information. If the loan has mortgage insurance, you MUST go through your servicer. Nobody can do a HARP refinance with mortgage insurance on the current loan other than the current servicer, unless they’ve recently changed the guidelines.

    “Open Access” IS a HARP refinance. All Fannie Mae HARP refinances are called “DU Refi Plus” and all Freddie Mac HARP refinances are called “Open Access”.

    If your loan has mortgage insurance and is with Freddie Mac, you can only get a HARP refinance from Citi.

  • Andreas

    I have 3 Wamu/Chase loans, two rentals one primary.two are fannie(option and 5/1 arms) one freddie(5/1 arm) all at or under 95 ltv. I am told by Chase that due to my original loan being a low doc stated type that it does not qualify for Harp. I have spoken with 4 chase agents and they either say no qual or not eligible for streamline(basically a nice way of saying no qual. I can’t find anyone that is discussing this aspect. I have perfect credit no pmi and meet every criteria. Also I have a second that did not show up on title when I did a refi and pulled $100,000 out. It shows on credit file but not in title. If I can’t refi and loose the house would the second be the legal first?

  • Andreas,

    It may be an internal thing as to why Chase won’t do it.

    Did you check any other HARP lenders? The “no PMI” means anybody can try.

    If the 2nd was never recorded to title, then it’s unsecured. I would check your county public records to see if it was recorded.

    The non-owner options for a Freddie Mac Open Access look pretty good with the right lender.

    What’s the terms of your loans now?


  • Dan

    Thanks for the informative info on HARP. I have been solicited by my lender to refinance under HARP. It is for an investment property (single family home) for which I have 80-90% LTV. Some sources seem to suggest that HARP refinance is only available for owner-occupied properties. Do investment properties qualify?

  • Dan,

    Investment properties DO qualify. I priced a 30 year fixed at 5.5% on a non-owner property at 100% of the property value two days ago. It was a Freddie Mac loan. I was very impressed with the pricing.

  • andreas

    Did some more reseach on the Fannie Mae Harp refi with Chase, including talking to Fannie Mae directly. It appears that Chase and other lenders are qualifing borrowers with their own underwriting criteria, not directly related to Fannie Mae guidance(DU Refi qualifing program)and if the loan you are trying to refi was originally a low dac/stated loan these lenders will require full doc even though fannie would refi it with their streamlined system, that system often does not require an appraisal or more than verbal proof of income. So I am of the understanding that going with another lender other than the servicer would be prudent due to the new lender not having the original loan criteria in there system. The ironic thing is, should Fannie kick it out for manual underwiting they would require you to go through the original servicer (another fee and credit check). How about a public option for doing refi’s where lenders don’t make 8-$16,000 for selling fannie or freddie a loan they already have on there books and can be streamlined in their “DU REFI” program in 15 minutes with a $75 no apprasial fee. I have an an underwater 6.5 5/1 set to reset in year, never missed a payment and a 750+ FICO. So at this point Chase as the servicer and seller of the original loan to fannie (do they have any fuducary responsibility to fannie/Taxpayer?) would rather me default (in my best interest Moral hazard aside) costing Fannie $100,000 plus and making Chase a good chunk charging Fannie/Taxpayer for servicing the forclosure process. I have heard(lind-waldock)that for the responsable hard working self employed risk taking American that is being hung out to try in all this, could take matters into their on hands by selling Eurobond futures contracts (3 month Libor) on the CME, that if done right would lock in their current Libor .75 + Margin (2.1 margin in my case) for a effective fixed interest only of %3.85 for 25 years. Tell me I am missing somthing please as I am clearly going insane.

  • andreas,

    Yes, many HARP lenders will crucify you if you did your previous loan low-no doc. All VERY good points. When we run the file through Fannie Mae’s system, it just checks to see if it’s a Fannie Mae loan and we follow the guide on what’s needed. It sounds like the original servicers are actually making it harder on their existing clients.

    Yes, the system is designed to make the new lender money but they do have skin in the same. Loan defaults, they share the loss. That’s why many lenders won’t go to 125% when the guide allows them too. The last time I checked, the lender has up to 6 months post closing where they can buy back the loan. That’s a long time to wait to see if a homeowner will default on a 125% loan.

    You lost me on your 3.85% theory…LOL. I’m not sure sure how selling Eurobond futures is going to lock the Libor at .75% for 25 years. I think your rate would be 2.85% if it did work. Tell more so know what you’re talking about, but at this moment, I’m not getting it.

  • KV


    Great site and service you have here. Here’s our situation. Our primary mortgage (no second) has an outstanding bal of $194,000; we recently had it appraised for $162,000 which put the LTV ~121%. Our monthly payment is $1,350 and there’s no mortgage insurance on this loan. We originally refi it in 2008 with a broker with Bears & Sterns as lender. It was subsequently purchased and is now serviced by Chase. The loan is guaranteed by Fannie Mae (I checked).

    We are current with payments and really are not in hardship. We’re trying to decide on whether to sell our current home, rent it, or stay. We probably don’t qualify for short sale. We don’t qualify for the HAMP.

    The only other option is the HARP. I’ve been reading and researching this but still have additional questions:

    1. By all accounts we qualify for HARP. I approached Chase and one rep said I didn’t qualify because the loan didn’t originate with them but through a broker. He said it was a limitation set by Fannie Mae. I took his word but did further research and could not find any such restriction from FM. Is this just Chase’s way of not wanting to do a HARP Refi at LTV of 121%? It’s sounds more like of a internal Chase restriction than a govt. Pardon my laymen understanding but is this similar to what Chase told Andreas in above post?

    2. If I can refi with someone else than Chase, I will. Our current interst rate is a decent 5.75% 30yr fixed. I’m not sure we can get any better than that rate when factors such as LTV @121%, credit score (my spouse is 800 but I have a bk in 2001), and points/fees comes into play.

    3. Under HARP, can you go from a fixed to ARM? Will any lender do an ARM with LTV 121%? I’m assuming no but…

    4. What about FHA for our situation?

    We’re kind of stuck in the middle where we really don’t qualify for anything. We’re leaning towards just renting the house, take some monthly loss, and maybe break even in 2, 3, 5yrs?

    Thanks for any insights you have.

  • Andreas

    Bad math %2.85 I am already starting to feel better. This is the link to the arm lock theory http://www.lind-waldock.com/education/ewire/archives/705/feature01.shtml. Any extra research by Joe six pack on this would be helpful. I didn’t realise the lender still has liability after selling to Fannie,Freddie or Joe. Perhaps Uncle Sam should should take that liability, that’s what Joe was made to believe in the rolling out the plan speeches. I wonder how it would come off if Obama said we are rolling out these plans, but we have to first get permission from the good folks at Chase, Citi et al. So now the question is what lender is relying on the Fannie and Freddie rules primarily and only charging $4000 over wholesale for the privilege.

  • KV,

    FHA is out of the question for you. FHA is great for people who have two loans over 100% but the first is under 97.75%.

    Chase’s decision to NOT do the refinance is purely based on their own overlaying risk guidelines.

    You’re correct in that you do qualify. You just need to find a Fannie HARP lender in your area who can finance up to 125%.

    Your rate is pretty good considering your value and that you don’t have mortgage insurance. You CAN go to an adjustable rate option, but no interest-only. I just priced a Fannie Mae HARP 7/1 ARM for someone today.

  • Ginger

    Hi Kevin,

    I am looking to refi an adjustable mortgage into a fixed. I have contacted one lender and it looks like I can do a conventional loan–credit score is no problem, and the loan is for $130K (no cash out)–I don’t know the appraisal on the home but zillow lists it at $300K but I think that is inflated–probably value is low to mid 200s. I have a Fannie Mae loan w/ Chase and there is no Mortgage Insurance on it.

    Then I found info on Fannie Mae and HARP. Should I do a conventional refi or should I contact Chase and ask them about HARP. Are the interest rates the same? I am wondering if I will have to pay fees w/ HARP or do they waive them? THanks.

  • Ginger

    On the off note–a question unrelated to HARP–can I go to a different lender? I went in to meet w/ a lender, brought all my documents, was approved, signed several docs (work verification, letting them pull credit etc . . .) (but I did not sign final loan docs) and locked into a 5.00% rate. I was asked if I wanted to lock in at that rate and I agreed.

    I found out a few days later they thought they had locked me in (it was close to 4:00pm) but turns out the rate was not locked and now has risen. I was asked if I wanted to lock in the higher rate, but I missed the 4:00 deadline to do so today. I am wondering if I should go to another lender or if this is a common error.

  • Ginger

    Finally, just want to add the home is my only home, I live in it and it is a home, not condo. Not sure if that makes a difference w/ HARP.

  • Dan

    My primary home is financed by 2 loans which are both Fannie Mae. The combined amounts of the 2 loans easily meets the LTV of 95-100% for a declining market. No PMI (original financing was 80/15). Chevy Chase representative in the refinance department is trying to tell me that they do not do HARP refinancing. IS a loan servicer able to refuse to follow HARP guidlines when they do not own the loan? She is also trying to tell me that I wouldn’t benefit from it anyway. However, with FHA refinance I would have to have the home appraised and doubt I would have 80%LTV to avoid PMI. I want to consolidate the 2 loans I have and acquire a lower interest rate.

  • Dan,

    How did you verify that both loans are owned by Fannie Mae? Were they both used to purchase the home? It’s very rare to find a 2nd mortgage owned by Fannie Mae or Freddie Mac.

    HARP refinances are not required by the current servicer. In fact, some servicing companies do not do loan originations at all. Your loan does not have PMI, so you don’t have to go to your servicer. Just find someone who specializes in this form of refinancing and let them do it. The current servicer will not have anything special for you anyways. Email me if you want a suggestion for someone in your area.

    FHA 30 year loans require Mortgage Insurance regardless of how much equity there is. They do not follow the same guidelines as conventional loans. FHA 15 year loans do not require mortgage insurance if there is at least 10% equity.

    If your first and second are both owned by Fannie Mae, then refinancing and paying them both off would likely be beneficial.

  • rebounder111

    This is the most coherent source of information on this subject I have seen in a while!

    I am little confused about your post though and whether or not I could possibly refinance with FHA. I have two mortgages totaling $224K ($164K & $60K) on my property. The primary mortgage is a FreddieMac backed mortgage with OneWest/IndyMac Bank. There is no PMI.

    I am interested in doing a refi because my primary mortgage is a 5/1ARM that recently started to adjust. I benefited from low rates with this first adjustment and I’m now at 3.125% from 5.875%. However, my rate can adjust every 6 months and I don’t like playing Russion Roulette.

    I would estimate that my property is now worth $190K on the low end (due to some neighborhood foreclosures). I *should* qualify for a HARP refinance under the 125% LTV program but OneWest gives me a new story every time I call them. I would love to be able to not deal with them at all.

    Is your post saying I could do a 15-year fixed with FHA (no MIP) or a 30-year fixed (with MIP) with FHA? Does this work with my numbers?

    Thanks for any assistance!

  • rebounder111,

    FHA is an option but I would not go down that route first.

    You only have to go to One West to refinance if your loan has PMI, which it does not. You should be able to do a Freddie Mac HARP refinance with any Freddie Mac lender as long as your second mortgage company will subordinate their loan. I’m doing this now for another client who has a Freddie Mac 1st mortgage with Chase and a 2nd mortgage with Citi.

    You also can do FHA. Your understanding is correct. You can do a FHA loan with MIP on a 30 year loan. If you do a FHA 15 year loan and your new loan is at 90% of your current appraised value or less, no MIP is required. FHA loans do not have a combined-loan-to-value limit, so it doesn’t matter what your second goes to. You only must qualify the first mortgage limits.

    Long story short, you should be able to do a HARP refinance or a FHA refinance without dealing with One West. A Freddie Mac HARP lender who also offers FHA will be able to give you both options and let you compare the differences.

  • Michaela

    Very helpful info, thank you.

    I’m have a townhouse in CA, and am underwater. I’ve been trying to work with quicken on getting my 1st (BofA/Fannie Mae) rolled over to HARP under the 125%, but they seemed inclined to do 125% with first and equity line (WFB) combined. Credit score above 800, no significant debt, but having trouble finding someone to do the lending on a first at 125%. Still in fixed ARM now, it will readjust in 2 yrs, but I don’t think the value of my place will recover in that time. Appreciate any suggestions, thank you.

  • Michaela,

    There’s a really good chance that your home equity line is not a Fannie Mae or Freddie Mac loan. In fact, it’s almost impossible. It’s more likely that your only option is to do the first mortgage and keep the second mortgage the way it is.

    Did they tell you this?


  • Michaela

    I’d be totally fine if they were to leave the equity line alone. But the problem is when they add the equity line, I no longer meet the 125% HARP range. And they are saying that they look at both to determine the percentage…and asking me to pay 60K to meet that range. I’d be happy to pay 30K to meet the 125%range on the first, but so far, they’re not agreeing with me, but another 30 K on equity line isn’t feasible.

  • Michaela,

    This is where these loans get confusing.

    HARP’s 125% limit is for the FIRST MORTGAGE ONLY. There is no limit to what the two loans are combined.

    However, that does not mean a lender has to go to that limit. They can overlay their own guidelines to protect themselves.

    How much is your first mortgage alone?

  • Michaela

    Appraised at 270K, and first is at $360K. Website says they do 125% financing, but I guess they don’t specify if that’s for first and equity. I have adequate funds to get my first to 125%, but need to find a lender who’s willing to do that with me…

  • Michaela,

    Technically, you fit the guidelines. You’re refinance would be pushing HARP guidelines to the very limits, but you do qualify.

    Have you only talked to Bank of America?

  • Michaela

    Yes, BofA only goes to 105%. So I tried working with quicken loans, but current roadblock as described above.

  • Sheri G.

    Keane — so happy to find your helpful site! 2 questions: (1) If it’s true, on what date did HARP relax income requirements for homeowners having a loan to value under 75%? (2) Is there recourse for home owners who missed out on lower interest rates due to misinformation and/or delays by their bank? In 2009, I pursued every option available to modify or refinance in order to reduce monthly payments. My income had dropped drastically so I did not meet requirements to refinance. But no one could tell me why the modification was denied. I called Chase again in March of 2010 and was told that I do qualify for HARP. After one year of red tape and wasted fees, I didn’t trust the Chase Representative. I asked important questions, but by the time they researched and got back to me, interest rates had risen again. Different Reps gave me different answers so I was concerned. In addition, my Chase Rep dropped the ball, causing me to lose another quarter point. On 3/31/10, I finally trusted Chase and was 99% ready to go, but waiting for one final question to be answered. The Rep did not get back to me until 4/1/10. He had assumed that the rates would remain the same on Good Friday because the markets would be closed. As you know, the bond market was open and rates went up again. I know it was only a slight increase this time, but I am already short each month and even an extra $25 to $50 each month would hit me hard. And as the rates increase, the HARP fees and costs rise. And obviously, it would have helped me even more to have qualified when rates were below 5% and I could have saved $100 to $200 per month. Now, I have no idea what rate I’ll be able to get on Monday 4/5/10.

  • Sheri,

    I’m sorry to hear about how your loan was handled. Remember that you do NOT need to use your existing servicer unless your loan has mortgage insurance. Most of the large banks are not doing a very good job handling HARP refinances.

    As for your questions, I’m not sure if there was a date where HARP income guidelines were more relaxed, but you typically don’t need a HARP refinance if your loan was at 75% of your value or less.

    Unfortunately, I do not know of any recourse. Remember that HARP is a true, voluntary refinance program. You should be able to lock your rate just like any other refinance. I don’t know why this option has not been made available to you, but it should have.

  • Sheri G.

    Thanks Keane —

    (1) Can you recommend other servicers you trust in Chicago? Since my loan does not have mortgage insurance.

    (2) Yes, my loan to value is at 75% or less so I typically wouldn’t need HARP. But I don’t have the income to qualify for other refinancing options (unless you can suggest some I haven’t looked at). If HARP isn’t the right program, then what is the right program for those who want to refinance but have lost jobs or lowered income?

    (3) Is HARP a truly voluntary program on the part of the Servicer, meaning they don’t have to do it just because the home owner qualifies and wants to do it?

  • Cynthia

    This is a great website for information. Here is my situation.

    I have a combined 1st and 2nd of $211,500.00, 1st ($188,500)is with GMAC (fanniemae) and 2nd ($23K) is Citimortgage. My home appraised for $206,000.00 in October, 2009.

    I have a credit score of about 630 due to an investment property going delinquent, which now shows a late on the payment on the investment property. The investment property has since been sold in 09/09 and the mortgages associated with that property are now paid in full.

    My current mortgages have never had any lates or delinquencies on them and this is the only property I now own and is an owner occupied primary residence.

    The problem I seem to be running into is that for the HARP program I have a late on my credit, and the guidelines say “no lates within the last 12 months on the mortgage”, does that mean on the mortgage that is being refinanced or “any” mortgages in general? I can’t get a clarification on that point.

    The other option is FHA, but what is the FHA requirements on mortgage lates?

    Thoughts please? I am paying 6.5 on my 1st and 8.4 on my 2nd.

    Also looks like there may be options to go 105% is that to combine the loans?

  • Cynthia,

    HARP loans are only for Fannie Mae and Freddie Mac loans. Second mortgages are very rarely owned by either of those two entities, so you probably cannot combine them.

    FHA allows you to go to 97.15-97.75% of your FIRST mortgage and no limit on the second, so that would be an option. They are also more flexible with mortgage lates. Lastly, your score is high enough to do a FHA loan. This appears to be your best option.


  • Andreas

    I keep hearing that you can Harp refi with another lender, but my understanding is that will only work if the new lender can process it under Fannie/Freddie? streamlined du-refi. If that system asks for additional information a new lender can’t do the loan, and you could be out time, fico points and app fee if they are sneeky (not likely lol). I have been reluctant to try this route and am waiting until Chase starts applying harp to their Wamu stated loans. Any knowledge on this would be helpful.

  • Andreas,

    The system will not request any more items than what Chase will require.

    I’m not trying to be bias, but in all honesty, the only reason you would stick with Chase is because you have PMI. It’s more important that your loan officer be an expert at HARP refinances. The items requested for a HARP refinance are the same for any lender. HARP refinances ONLY work with Fannie and Freddie loans. If your WAMU loan was not a Fannie/ Freddie loan, they cannot refinance it as a HARP refinance.

    A lender cannot collect fees from you to take an application. It’s against new regulation Z laws. At the most, you will be out a credit report fee which ranges from 10-25 dollars.

    If you give yourself only one option, you are shorting yourself the possibility of working with a lender who’s more knowledgeable and will give you a better deal. As difficult as these loans can be, they are still regular refinances. Either the loan officer you’re working with knows what they’re doing or they don’t.

  • MS

    Hello Keane,

    Just a word of caution. I agree with all you had to say with respect to HARP. I am victim of HARP trying to re-fi for the last 6 months or so but still struggling…. As a result this is the 3rd time my app is being processed 1st with CITI (same lender) then with a Cred Union (Open access) and now again with CITI (since I had PMI)…. All these 3 times in the last 6 months they asked for an appraisal and I had to pay for them from my pocket – so apart from the Credit check fee (which was $15 a POP) I incurred appraisal fee from my pocket and still waiting with Uncertainty…. I am not disouraging anyone but like Keane said you need to land up with the right loan officer (with HARP knowledge) which is never under anyone’s control….
    – MS

  • MS,

    You’re absolutely right. A good loan officer would’ve had you go back to Citi before ever committing you to an appraisal. Inexperience and lack of knowledge can be costly to a customer.

    I’m sorry to hear you had to pay for 3 appraisals.

  • Kim Carter

    We purchased our home in 07 for $600,000. 1st is 401,000 @ 5.75 and 2nd is 93,000 at 9.375 15 year. We applied for a HARP loan and thought all was good. Our appraisal came back 32% down at 390,000. BOA just turned us down in underwriting stating our appraisal was too low. Even though our LTV was at 105% on the first mortgage. Our 2nd mortgage company ok the resubordiation. Any other options out there for us? Our credit med score is 700 and we have excellent job history.

  • Kim,

    Absolutely. A 105% first mortgage with a high 2nd mortgage is not a difficult HARP loan to find. However, remember that not all HARP lenders are the same.

    I would recommend you talk to a lender that has more options than Bank of America. For example, my company offers HARP loans for many banks closed both directly from us or brokered, so I can usually find a lender that fits my clients needs. I would look for a mortgage lender who’s experienced in doing HARP refinances in your area that has more than one option available for you. This will insure that you don’t waste time and money. The unfortunate news is you probably would need to order another appraisal.

    Good luck!


  • GK

    I have an investment property in Boise, Idaho whose value has come down from $190k to $150k. My current mortgage is 30-yr fixed @ 6.75% from Wells Fargo and the current loan balance is $145k. I am going thru severe financial hardship as I lost my job last year. I checked that the mortgage is with Freddie Mac so can this investment property qualify for HAMP (loan modification)?

    If not, what are my best refinancing options? I will consider making a down payment to qualify for the best loan product as I really need to refinance this very high interest rate loan. My current mortgage is $985/mo and I will also consider for it to go up a little to build equity.

  • vicky

    Do I have to pay up front fee in order to have One West bank to process my loan under HARP program? They also want me to lock in interest rate 5.75% and pay $1000 for that. Is this ligitimate ?

  • Marlon

    Hello Keane,

    Here are my current loans with Flagstar:

    1st: 5.375% 5/1 ARM resetting this October ($320,000 balance)
    2nd: 6.75% HELOC (balance $35,000)

    zillow.com estimate for my property is at $410,000 but it’s likely at $360,000 if appraised based on recent sales.

    I talked to Flagstar but the HARP quote they gave me is kind’a high (5.25% 0 pt). So I’m wondering what my chances are with going to a different lender. Any idea on what my options are?



  • Marlon,

    At least you’re lucky enough to know you can get a loan :)

    That’s a HARP loan that most lenders can do. If it’s priced where the 1st and 2nd are at 95% of the appraised value or less, you should get the same pricing a standard refinance.

    I would see if I could find the means to pay down the HELOC if the appraisal does come in that low and get the line lowered. This will yield you a rate between .25-.375% lower than what you’re being quoted. If you ask your loan officer what the pricing is at 95% CLTV, I’m positive you’ll get a much lower rate. I would explore the idea of using a 401k loan or something to the matter to get that better pricing.

  • MS


    Even if you roll in both the loans into One HARP you are well within the 100 % LTV this means there could be better rate options? What I have found is that generally the HARP rates are higher than the conventional 30 yr fixed rates. When I locked in my rate 2 months back in fact CITI quoted me 5.875% and I had pay 1.25 points to bring it down to 5.5% – I closed my HARP with an LTV close to 120% with CITI just recently.

    Marlon, – I suppose you do not have PMI with your current loan? Then you have your freedom to move around with servicers and shop around for the best rates around… The rates are very attractive currently from what I read….

    Keane, – Could you comment on this loan pricing? It is varying from Lender to lender and CITI kept quoting my high LTV as the reason for my ‘kind’ of hi rate on my HARP loan. Since I did not have too many choices I had to settle for this loan rate.

  • Marlon,

    The key is to be under 95% of the home’s value or less for the best pricing. There is a rate/credit/LTV chart that does include price hits over 95%. This does not mean you don’t fit within the guidelines to qualify, it just means you pay a premium for your loan for having a high balance to your home value. This is true for ALL HARP loans as it’s passed down from Fannie Mae/Freddie Mac.

    That’s why having the ability to pay down your balances so both loans combined stay under 95% will yield you better results. You can tell the lender you have the ability to do so and get the pricing you want, then hope the appraisal comes in higher. If you want to keep you HELOC open, I would recommend you you get a smaller first mortgage so the two loans combined stay under 95% if the appraisal does come in at $360k. It’s only a $13k difference from what I was calculating from your comment.

  • Marlon


    I bought the house at $430,000 Oct 2005. At the time, I already knew I was paying for an inflated price but the pressure to buy then was just too much. I felt like the more time I had to wait to buy, the higher the house prices are going to be. Had I known the upward trend was not going to continue, I should have stayed in the apartment. Anyway, it’s too late for buyer’s remorse now. :-)

    I see what you are saying about keeping CLTV at 95%. I’m going to eyeball the recent sales (07604) in person to get an idea if my estimate of $360,000 is too pessimistic. If I get lucky, it will be closed to zestimate.

    Even if it appraises at $360,000, I might still be able to cough up $13,000 to get to 95%.

    The great thing about Flagstar’s current offer is there is no need for appraisal. The guy I talked to mentioned something about an “automatic appraisal” of 84% LTV but he was probably only referring to my 1st loan.

    If I go with another lender, what are the chances that Flagstar with subordinate the HELOC? I would want to keep it since it’s only at 6.75% and it’s a bargain compared to having to pay PMI. I’m planning to pay off the HELOC in 4 years anyway. I assume my understanding is correct that I don’t have to pay PMI even at 95% CLTV since I already have a 2nd loan.



  • Marlon,

    You won’t have to pay PMI since your current loan doesn’t have it. This includes if your value was over 100%.

    Flagstar will subordinate from my experience. I’ve asked them to subordinate on a loan I originated and they did it, so I expect nothing less now.

    I’ve heard more existing lenders offer a no-appraisal option, but I’m still waiting for confirmation that someone has actually closed on one. I’ve also noticed that the pricing is always higher. 5.25% with no points isn’t bad for above 95% value though. If you keep both loans at 95%, you should be able to get 4.875-5% on a no-point loan, which is even better.

    Have you thought about shopping the loan on Zillow Mortgage Market Place?

    Some HARP loans aren’t worth shopping too much for price. Some clients I talk to should take the first guarantee the loan will close. However, you’re not one of those clients. Your loan is very do-able. If you’ve prepared to keep your loan at 95% CLTV and enter a quote on Zillow’s engine, you should get multiple, good quotes. Be sure to mark if your loan is Fannie or Freddie and ignore the PMI being added to your loan.

  • Marlon

    MS, I currently don’t have PMI as I piggybacked to HELOC when I purchased the house at 5% downpayment.

    Are you saying I can combine both loans into 1 HARP loan and not having to pay PMI? I assume this is also what Keane meant when he said “You won’t have to pay PMI since your current loan doesn’t have it. This includes if your value was over 100%.”. That sounds like a big win and too good to be true so please kindly confirm it before I dance for joy :-).

    Keane, I will try the Zillow Market Place. I would assume this would imply credit checks. So far, I have been able to avoid credit checks and appraisals. I’ve been very careful of credit checks but I know that at some point, those would be absolutely necessary but I try to delay them as much as I could until I am sure that I am going to go all the way (as oppose to right now where I am still in the contemplation stage).



  • Marlon,

    I apologize for the confusion, you won’t be able to combine the two loans :( I meant even if your value DID exceed 100% on your first mortgage alone, you wouldn’t pay PMI.

    Zillow doesn’t require credit checks from any lender until you’re ready to proceed. You should hopefully know your credit score range from the applications you’ve done so far. Zillow allows you to remain 100% anonymous and enter your refinance info including your requested loan amount, est. credit score, est. income, etc. You also can mark if your loan is a Fannie or Freddie loan, which you should do to get accurate HARP quotes. I can’t stress enough the price difference you’ll get at 95%, so I would focus heavily on that. Even if you cash-advance a credit card, remember that you’ll get to skip at least one mortgage payment and get an escrow refund to help pay back that difference.

    Good luck!

  • Marlon


    Thanks for clarifying.

    Went to Zillow Mortgage Marketplace but have not been able to find the form where I can mark the loan as Fannie May or having no PMI.

    I clicked on “Mortgage” tab to get to the 3 field form with text “Are you sure you’re getting the best rate?” Clicked “Continue” then it gave me another form with more input fields but so far I can’t find where I can enter those information you mentioned. Finally the quotes that I got seem to be for conventional and FHA.

    Sorry if it turns out simple yet I can’t find it.



  • Helen

    Thank you for your site, very informative! We purchased our house june 2006 during the peak in Arizona. We stupidly got an interest only loan with a heloc. The 1st is at 432 and the 2nd is at 92. Current value on home might be 400. Wells Fargo services and I believe still holds our loan. If I’m reading it correctly, we fall under all the new qualifications for the new FHA refinance program. Is that correct? What would we need to do or could we do to help qualify for the new FHA refinance. We could potentially come up with as much as 20K if needed via 401K.
    thank you,

  • Helen,

    The new FHA program hasn’t had any traction yet. Is the loan you have a Fannie Mae or Freddie Mac loan? Does it have mortgage insurance? The last I heard, Well Fargo WOULD do a HARP refinance on a loan they service if it has mortgage insurance.

  • Helen

    Thank you, it is not held by either fannie or freddie. Wouldn’t we have to have mortgage insurance with an interest only loan? We didn’t have down payment.

  • It depends if you took out two mortgages or just one. Some non-fannie/freddie loans still had mortgage insurnace and others did not.

    Your best bet would be this FHA program if your loan is not a Fannie or Freddie loan. I’ll be updating this post the more I heard about this program as well as updating on the availability of this program.

  • Vik

    I have two loans on my house and getting close to closing using HARP. First one is at $330,000 (CITI) and second $97,000 is from Ever Bank. I am getting 4.875% (1.5 points) for 30 years fixed with CITI. I am not sure by looking at the market situation, paying 1.5 points make sense. My appraisal was $13,000 short of what was expected but CITI covered that. Is there something I should be looking/reading before making the final call?

  • MS


    I am just curious… How did CITI cover a $13,000 short on the appraised value?… since I have had CITI for a while and they gave some much of troubles because my value came low and I had to do 3 appraisals (with in 6 mos) before I was able to proceed to closing… My guess is that 4.875% is an awesome 30 year FIXED rate…

    – MS

  • Vik

    My broker negotiated that for me with CITI. I can’t say why they agreed but they did. I do have excellent credit history, never missed payment etc. I have the GFE from them and that shows the first mortgage amount of $330,000 with 4.875% 30 years fixed.

  • Vik,

    When you say that Citi covered that shortage, do you mean they lowered your loan amount payoff?

    I think your best bet is to use a broker who can broker it to Everbank. Ask your broker if he’s approved with them. Obviously they’ll subordinate to their own loan. Their pricing on HARP refinances are very good. I use them all the time on loans with a second mortgage. You must be at 100% of the home value on the FIRST MORTGAGE ONLY and there’s no limit on the two loans combined.

  • Vik

    CITI didn’t lower the loan but was fine in considering the appraisal which was lower than expected so accepted. My subordination is also accepted by Ever Bank. I just wnated to make sure that I am going for this program with some good cost down from my pocket (closing $1200 + points $5000) and its all good. By reading everyones issues here kind of rang the bell to make sure everything I am doing is right.

  • Terry

    I’m trying to get a harp loan. I have a freddie mac mortgage interest only at 6.5 % and I’m having a hard time because all of my income doesn’t show up on paper (self-employed and waiter) Do you happen to know the income required to get a harp loan on a 264,000 mortgage? My house is valued in the 290000-300000 range. Does each bank have a different qualification? Also, are you familiar with Quicken loan, Us bank, and Flagstar? Any recommendations? My present bank does not do the harp with freddie mac and I prefer not to work with them (indymac now one west bank) not so nice!! One other question, does your credit score make a huge difference? At one time my score was 720 now it’s at 688. Thanks for your help.

  • Terry,

    I’m very familiar with all 3 lenders you mentioned. You don’t have to work with your lender…thank goodness. Some servicers, like Cenlar, don’t even originate loans.

    Credit does make a difference. The nice thing about HARP loans is they had a change where there’s a 2% fee adjustment cap last year. What this means is if you have risk related adjustments to your loan, such has low home value, low credit score, high debt ratio, etc, you only have to pay 2% in fees more or take a higher rate of around .75-1% at the most.

    This means the premiums you pay for these loans are limited.

    Push and push for the lowest rate if you can. You have a little equity which really helps. Remember that your income limtis your ability to get a loan because we calculate your income IN RELATION TO your debt payments. A lower interest rate will lower your payment, thus potentially get your payment low enough where you qualify. If you still don’t qualify, look to move your loan balances around so your payments are less. If you have two credit cards and requires 5% of the balance as a payment and the other requires 2%, move the balances so your payments are less. This will lower your debt ratio which may help your income problem also. It’s a small part of the ratios, but changing to a cheaper insurance company at the same time might do the trick. Nobody can tell you that you need to change insurance companies but we can say your payments are too high to qualify and insurance is calculated. All of these small things make a small difference but could potentially fix your large problem if all were done.

    Good luck!


  • Marlon

    Hi Keane,

    Just an update on what’s going on with my on-going DU Plus Refi…

    To review, I owe 320K on 1st + 35K on HELOC, both with Flagstar. I got an informal quote about a month ago of 5.25% at 0 pt with Flagstar itself (no need for appraisal) and I thought I could do better outside. Credit score is above 770. House purchased in 2005 at 430,000 but optimistic appraisal could be around 375K.

    So, anyway, I just got a GFE yesterday for 4.875% at 2 pts which is worse than the Flagstar offer.

    This is what the loan officer’s response when I inquired why it’s terrible:

    “The mortgage product that we are talking about which is the Fannie re/fi plus does have many risk price adjustments attached to it. In your case, the 2pts adjustment are for ltv/cltv, credit score, and subordinate finance. As you can see this product is not as easy as one will think. Keep in mind that these adjustment are impose by Fannie Mae all across the board. With that said, if Flagstar is willing to waived these adjustment go for it, but first have them disclose the loan the same way I did, so you can compare apples to apples. On the other hand, if you property appraised for more that 419K then the picture changes for better”.

    Does this sound reasonable? When he says “across the board”, does that mean that even if I get 10 quotes somewhere else, it will still be pretty much the same deal?



  • Helen

    Hi Keane, I have a follow up question about the FHA refinance for underwater borrowers… I just got off the phone with my lender and he, of course, hadn’t heard of the program but was almost certain that any program like that would not apply to jumbo loans. Is that true? Our loan is considered a jumbo loan (430 on 1st and 90 on 2nd) and therefore, hasn’t qualified for FHA or VA financing in the past.


  • @Marlon

    The loan officer is right in that there are many price adjustments. Yours would have many regardless of credit because of the subordinate financing and high CLTV, but Fannie Mae implemented a price adjustment cap of 2% last year. This means the lender can have many adjustments but it will never exceed 2% total in fee adjustments.

    The pricing isn’t bad but not great. If you can find a broker who can price your loan with Everbank, you will get better pricing. I priced a loan hitting their price adjustment cap and it was at 5% with no points. Both offers are decent however.

  • Helen,

    That’s not true. One of the benefits of the FHA refinance options is it does NOT need to be a FHA loan. In fact, it cannot be a FHA loan if you’re getting the difference reduced on the payoff or subordinated. Who is your loan with?

  • Marlon


    I have the following quotes so far:

    1. From the original broker I mentioned previously which is 4.875% at 2 pts (he said he already communicated with Fannie Mae and Flagstar).

    2. zillow guy1 (First Choice Bank) – 4.875% at 0 pt (< 95% CLTV) (presented via informal estimate sheet)

    3. zillow guy2 all great reviews – 4.675% at 0 pt (< 95% CLTV) (presented via formal GFE)

    4. Flagstar Agent – 4.99% as of yesterday at 0 pt with no appraisal (only needs driver's license he said, hassle-free subordination)

    The last 3 guys have not communicated with Fannie Mae compared to the first guy (although I don't know what that means). I'm thinking that maybe what the first guy is implying is that even if I go to a different lender, some other party (either Fannie Mae or Flagstar?) will still stack adjustments and so I would still end up with pretty much the same 2 points while rate will still remain at 4.875%.

    With just comparing numbers, I would tend to go with the 4.675% quoted by this guy from zillow with 37 great reviews. But at the same time, the first broker seems to be implying that by the time other lenders/brokers communicate with Flagstar and Fannie Mae, I will still end up with pretty much the same deal.

    I'm confused. I'm not sure if I might be comparing apples to oranges. Any idea on what I should do?



  • Kim Carter

    Update on our situation. We have a 1st at 400,000 @ 5.75% (Just transferred to a new bank LBPS from First Horizon )our 2nd is with First Horizon of Tenn @ 89,500. We were turned down from BOA because our appraisal and our DTI was too low. Our place appraised at 394,000 in April. Purchased for $600,000 in 07.
    Our loan officer has tried other banks but nothing will work. Do you have any other suggestions for us? Our med credit score is 700 and our DTI is 50%.
    Kim Carter

  • Kim Carter

    Oh by the way Keane, I am in Ridgefield, WA, would you be able to help me?

  • Helen

    Hi Keane,

    After I sent you the last email, I contacted the loan mitigation dept at Wells Fargo (who both hold and service our 1st and 2nd). She was very helpful and told me that the program that will come out in Aug-Oct will be called a principle reduction, not to be confused with HAMP and although details are still sketchy, it appears it will be for people who very underwater (we are over 200,000 underwater) with good credit (no hardship necessary). It won’t lower monthly payments so we’ll need good income proof, it will just lower principle so we can start to gain equity. I’m optimistic but still weary…

  • Rama

    I bought my townhouse/condo in July 2005 for 325k. I put 25k as down payment and took 2 mortgages(260k & 40k) for the remaining amount from BofA. I paid off my 2nd mortgage in June, 2009. Now I am trying to refinance my 1st mortgage using HARP but my new broker (QuickenLoan) is not able to get the under-writing done using this HARP program. And surprisingly they cannot give me any reason why I cannot qualify for the HARP. Can someone please advise what can I do to get this resolved. Thanks.

  • @Marlon

    Those price adjustments from Fannie Mae are with ALL lenders. One of your lenders is indicating that the other loan officers are not taking into consideration the adjustments. From what you’ve disclosed, there are price adjustments for having a combined loan-to-value above 95%, so the quotes hoping for 95% combined value or less will be higher if the property appraises as you’ve indicated.

    That said, the maximum price adjustment for these loans is 2%, so if you qualify for a 4.625% 30 year fixed with no points, you can get the same loan at 2 points from qoute #3. Quote #1 and #2 are the same if your loan does have 2% of fee adjustments. Have your 3rd lender give you a quote for assuming your home value is where you estimate with the 2nd mortgage taken into consideration and you should get a new quote that is still better than #1 unless the lender they were working with does not do HARP loans at that CLTV.

  • @Kim,

    Your credit score and Debt-to-income ratio may be your biggest problem. Conventional loans only let you go to 49% with strong compensating factors. I believe the only way you’ll be able to make this work is if you can get your ratios down to 45%. However, that may be easier to do than you think. Your debt-to-income ratio is determined by your debts compared to your income and your NEW mortgage. By getting a low enough rate on your new loan, you may be able to get your DTI to where you’ll qualify. Other small tricks, such as transferring balances to lower payment credit cards and shopping for cheaper homeowners insurance can also lower your debt-to-income ratio. Lastly, there’s multiple ways to determine a borrowers qualifying income. If your lender hasn’t explored all the potential ways of qualifying your income, your loan could have a higher debt-to-income ratio than it needs to be with no changes other than what documentation they need for the loan.

    You need a lender that will lend to 105% on your first mortgage and no limit on your 2nd mortgage. They do exist. The next key is to find somebody who can get your ratios down, which may take some creativity, but is possible.

    Lastly, yes, LOL, I can help you. I help homeowners every day with their HARP loan questions but only about 10% of them live in states I can actually originate the loan. Being that you live in WA state, yes, I can help you. However, I try not to advertise that too much because I want all homeowners to ask me for help if they need it and most won’t email me or call with questions if they know I can’t do the loan. If I can’t do the loan, I’ll go over all the hurdles they have, tell them what they need to look for on their refinance so they know what to ask for when they shop for lender.

    You can email me directly if you want me to handle your refinance. You can send the message on my contact page.

  • @Rama,

    It could have something to do with when Fannie Mae/Freddie Mac purchased your loan (see my updates on loan securitizatioon on this post). It could also be due to the fact your loan isn’t a Fannie Mae or Freddie Mac loan or your Quicken Loan officer didn’t do enough research to determine if it’s a Fannie Mae or Freddie Mac loan. 1 out of every 5 HARP loans I originate, I run across an issue where Fannie Mae or Freddie Mac states the loan is not owned by them when you search on their loan lookup tools. See my instructions on how to check. If the property doesn’t show up on those websites, don’t give up. Keep researching to make sure it isn’t owned by Fannie Mae or Freddie Mac.

    If it is owned by Fannie Mae or Freddie Mac and is eligible for HARP, your loan officer is making a mistake which isn’t uncommon. There are so many uncertainties that may lead to your loan officer turning you down that can be resolved in the right hands. Everything you’ve stated appears to show that your only reason for being turned down is that the loan is not owned by Fannie Mae or Freddie Mac and/or it was purchased by Fannie Mae/Freddie Mac after the qualifing securitization date, which may be possible.

  • @Helen,

    That’s great news! I’m attempting my first FHA- Principal reduction refinance now. After looking at all the feasibilities, it appears the lenders are only likely to take a reduced principal if they feel the customer cannot afford the loan otherwise, but we’ll see.

  • MS


    Like Keane puts it please do not give up till you get the bottom of it….

    I tried 3 times over 6 months timeframe before closing my loan using HARP. So if Fannie/Freddie owns your loan there is some HARP hope.

    – MS

  • Marlon

    Thanks, Keane!!!

    I just found this link about these HARP adjustments (LLPA) here: https://www.efanniemae.com/sf/refmaterials/llpa/pdf/llpamatrixrefi.pdf

    Btw, my HELOC had an initial credit line of $65,000 but it’s now frozen, so the $30,000 I already paid is non-withdrawable.

    Do you know if the HARP adjustments are computed using HCLTV or if it’s using CLTV instead? The LLPA matrix does not seem to mention HCLTV, whereas it specifically mentions either LTV or CLTV. (Or maybe CLTV is assumed to be HCLTV in the context of DU Refi Plus?)

    I’m hoping that the LLPA adjustment computation will use my HELOC balance of $35,000 (and not the full credit line) so it would be easier for me to reach my targeted 95% CLTV. My other option is for Flagstar to permanently reduce my credit line to my current balance of $35,000 (it’s frozen anyway), assuming Flagstar would be willing to do that (seems like that’s in their favor).

  • Marlon,

    Yes, that’s the matrix :) They will go on the line LIMIT, not the balance, so permanently lowering the limit to the current balance would be needed.

    Getting paper work to your new lender that will ACCEPT the Flagstar change is the tricky part. Lenders are quick to lower the limits but aren’t fast in getting documentation that the new first mortgage lender will accept.

  • Rama


    You are absolutely right. Fannie Mae purchased my loan in July 2009 which means I am not eligible for HARP program. I could have save $250 everything month had this refinance gone through. I am not sure if I can do anything now.


  • @Rama,

    How is your credit? If your have 5% equity or more and your credit/income is strong, you may consider doing a conventional loan with mortgage insurance. Mortgage insurance doesn’t have to be the monthly premium most people think of. You can pay a single fee and avoid monthly payments.

    The fee isn’t cheap, but if rates are much lower, you can sometimes pay the fee by just raising the rate a little. Let’s suppose you’re at 6.25%. You qualify for a 4.625% conventional 30 year fixed. You have to pay monthly mortgage insurance or a single 2% loan fee to avoid monthly insurance. From there, you can raise your rate and get that fee paid for by the lender, which may mean you take 5% instead of 4.625%. That’s still 1.25% lower in rate with normal loan fees, which makes sense for most consumers.

    Don’t give up. HARP is a nice option but that doesn’t mean it’s your only option. Good luck!

  • Jack Lu

    Hello Keane,

    Thanks for your valuable information and comments shown on your website, my friend recommends this site to me. I have two questions regarding the refinance under HARP.

    1) I have a Freddie Mac owned loan and am seeking an open access refinance by HARP. I was told to be eligible the home must be owner occupied. My home is at AZ currently occupied by my family, I myself got a job in other state and live in an apartment. My question is if I get a refinance under HARP now, can I rent my home after six months later (as my families will move out to joint me in other state)? For how long I can even sale my home? Can I buy another house after two years?

    2) I notice in your website you mentioned as UPDATE that “If you are looking to do a HARP refinance and currently have a fixed mortgage through Freddie Mac, you cannot do an Open Access Freddie Mac HARP refinance to an adjustable rate. You can only refinance to another fixed loan.

    Since I currently have an 5 year ARM adjustable mortgage, do you mean I can do an open access Freddie Mac HARP refinance to an another adjustable rate? If the answer is YES, could you please let me know the names of lenders who offer such adjustable rate for HARP.

    Thank you you much in advance and looking forward to hearing from you.


  • Jack,

    No problem. First, HARP is NOT only for owner-occupied homes. In fact, it may not even change your rate if you do the loan as a non-owner occupied loan. The reason why is because HARP loans have an adjustment cap. If you already have to pay all the adjustments for HARP for other reasons (credit score, equity or property type) any other price adjustment you would normally pay is removed. I know that’s confusing, but the simple answer is you CAN do a rental property and it may not cost you more than if you lived there. Pretty cool feature.

    Second, yes, if you’re on an ARM you can do another but you cannot do an interest-only ARM. However, the way that HARP loans price, the ARM may not save you much money than a fixed.

    Lastly, there are only 3 states in which I lend and AZ is one of them (WA and CA are the others), so feel free to email contact me for info on this. I can’t guarantee any of my options will fit your needs but I can at least give it a shot.

    Either way, I hope this info is helpful. Remember that on Freddie Mac loans that you cannot originate a loan more than $5k above what you owe now, so be prepared to pay some of your closing costs at closing.


  • Katie Rosa


    your site has engaged me even deeper into the world of re-financing our second home using the HARP loan. I am frustrated with WFB that they aren’t willing to secure us into a HARP loan when we have been on-time with our payments and with good credit. We share this home with another couple who also demonstrates good credit! Knowledge is power and Keane, you seem to hold a great deal! I will be in touch if I keep hitting a cement wall with WFB. Thanks! Katie Rosa

  • Katie,

    I haven’t had this experience with WFB, but I’ve noticed that B of A charges much more for their HARP loans vs. their competitors. I think this is because they know their customers check with them first, so why not make more?

    Even if you go with WFB, just call a few local lenders and see if WFB is in similar in price.

    Good luck!

  • Jack Lu


    Thank you so much for your quick response. First of all, I am glad to know that the owner occupied loan could be the same as non-owner occupied loan. In my case, I may select owner occupied loan since my families do live there now. Do you know for how long my home can change to rental property without violating the requirement of occupied loan ( 6 months is enoough?)?

    As for the second question, please let me know which lender currently provide open access adjustable ARM HARP loan. I contacted a couple of lenders, and they only have fixed rate loans.

    I am also interested in the loan that is only appled to three states, what is the major difference? Any detailed information are appreciated very much.

  • Debbie Koch

    Hi Keane,

    I was just told by Wells Fargo, that I did not qualify for the Harp program, as my loan is not Fannie Mae owned. My 1st loan is with OneWest/Indymac, and I have a HELOC with another bank. I owe $337000 in total and according to Zillo, my home is worth $299000. Right now I have a 6% 10 year ARM, which I still have 5 more years on. Can you tell me if I qualify for anything, or do I have to wait until I can get back more equity in my home?

  • Debbie,

    Did you find out if your loan is owned by Freddie Mac? HARP applies to both Freddie Mac and Fannie Mae loans.

    If not, you may still qualify for a FHA loan. If your first mortgage is less than 100% of your value and only your HELOC takes you over, you can use a FHA loan to pay off the first mortgage and subordinate the HELOC behind the new FHA loan. How much do you owe on the first mortgage?


  • Charles

    Any updates on the FHA refinance? I am underwater in Virginia. My loans are Fannie Mae loans — 1st Loan 222K @ 6.75% Arm resets 06/2011 2nd Loan 29K 10.625%. Property is worth around 175-180K. Do you have any advice on how to get the 1st loan refinanced using the FHA program?

  • Charles,

    Getting the FHA loan is easy. Many FHA lenders will fund this loan. It’s convincing your existing lenders to take less that makes it difficult.

    You should open up conversations with your first lender to see if they’ll make a new 2nd mortgage for whatever you owe above the FHA 97.75% limit. If they say “yes”, you would need to see if the 2nd mortgage company will subordinate and go in 3rd position behind the new 2nd mortgage. Very difficult but possible.

  • dd St. Louis

    I currently have a 30 year fixed 7% loan with Flagstar and I am paying PMI. We purchased our home for 150,000 and owe 143,000. Up until my husband got laid off, I had exceptional credit…I had no other choice but to file bankruptcy. My bankruptcy was just discharged this month. My husband is back at work, but there is already talks of another lay off so I am trying to get us to a “good” point. I feel I am getting the run around every time I talk to Flagstar. The last person I spoke to said they weren’t set up to do a HARP loan…and that was yesterday. So my question is, will I even be looked at for a HARP refinance with the bankruptcy? What other options do I have?

  • dd St. Louis,

    They’re correct, you won’t qualify for HARP with the bankruptcy.

    The loan program is designed to be like a traditional conventional loan with loose guidelines on loan-to-value.

    It’s sad because Flagstar is the only confirmed source I know that will do HARP loans on their existing mortgages if you have PMI.

    HARP expires in May of 2011. If the market turns where you owe near 100% of your home value, you can apply for a FHA loan in 2 years (2 years from bankruptcy discharge).

  • dd St. Louis

    With that being said, if my husband gets laid off again, would we be considered for the loan modification program at that point?

  • JFG2000

    I currently have a mortgage with BoA. The house is probably worth about the same as the mortgage. There is LPMI on the loan. BoA will not refinance. Do I have any options or am I stuck?

  • JFG2000,

    You do. I would venture to look at FHA. You can finance 97.15-97.75% of your home value on a FHA loan. You will have monthly MI but rates are very low for FHA right now, so if the rate is low enough, it will easily compensate for the added MI.

    Try to do a real evaluation of what houses have sold in the area recently to get a closer range of where your value is. Prepare for a worst-case-scenario and try to have available funds to cover the difference such as a 401k loan or an unsecured line of credit.

  • Oscar

    Keane – Great site! I sincerely appreciate all that you do to help us! I am a first time poster, and I’m hoping you can help me, too. I’m going to provide some info and hope that you can point me in the right direction, or if I should just leave my loans as-is.

    We purchased ought my home in 2003 for $410,000 with a piggy back loan. The first was for $322,700@5.25% 30-yr fixed (max conventional at the time). We still have this loan and still pay it monthly. The balance on the first mortgage is currently $283K. The second was for the balance ($87,5000, a 30 due in 15. In 2005, we took out some equity, paid off the second, and turned it into a HELOC with a balance of $135,000 (we locked it 6.44% for 20 yrs). We have a balance of ~114K on that portion of the HELOC. Since then, we took out another 50K in equity on the HELOC. We only have to pay interest only and it is not locked, but it’s been at 2.74% for like a couple of years. We do pay the interest and an additional $400 in principal each month on that portion of the HELOC. From that original 50K portion that is unlocked, we owe $41K. To summarize the HELOC, there is a locked portion at 6.44% with a balance of $114K, and an unlocked portion at 2.74% currently with a balance of $41K for a total HELOC balance of $155K.

    With a first of $283K, and a HELOC of $155K, we owe a total of $438K. Zillow puts the estimate at $443K, but I would think that recent comps put it closer to $425K. Having this data including the amount of the first and the HELOC and their associated interest rates, what are my options for refinancing? I don’t want to take out any additional equity, but if possible, I would like to reduce our monthly payment, reduce the interest rate, and combine the payments into one. I don’t know any of the potential possibilities, but would appreciate any advice and/or information that you may be able to provide. If necessary, I do have some money that I can contribute from a Roth IRA, perhaps in the 10-15K range. Thank you so much for your help.

  • Oscar

    Oh yeah, if it is important, my credit score is above 800. Thank you again for your help. I’ve contacted some banks, but the lack of equity seems to be the main drawback for refinancing.

  • Matt

    We bought our townhome in 2006 for 167900 and now owe about 160000 on it…I know we r within the 125% range because it is worth around 140,but we do have PKU and our lender is chase…our current rate is 6.6 and would love to refiance but I’m worried chase will not do this because we are so close to the 125%… we both have very high fico scores (790)… Also I heard doing the harp may hurt your credit…Is this true??? I have heard diff. things..we also have a decent income(close to 100k)… I guess I’m wondering if chase will work with us and I’m scared to call cuz I think it may harm my credit…any advice? Thanks!!!

  • Oscar,

    On a traditional conventional loan, you can only go to 95% of the home value. If you paid down the HELOC to this amount and lowered the line limit to your new reduced balance, you won’t need HARP to refinance.

    If you want to use HARP to overcome your loan-to-value issues, you can. The pricing for the loan will be higher than a regular conventional loan (approximately .25-.375% higher than a regular 30 year fixed). HARP will allow the HELOC you have to stay the same. Who is your HELOC with? Getting them to subordinate will be a key factor in your refinance.

    Your current rate is really good. To actually make your refinance worth while, you may have to avoid the loan-to-value price hit you would pay for a HARP loan and pay down your loans to 95%. HARP loans actually price very well up to 95% on the first mortgage. Since your first is already at 80% and under, the only reason you would need HARP is for the high 2nd mortgage, which comes with a price adjustment since it’s over 95%.

  • Matt,

    HARP loans will 100% absolutely NOT impact your credit negatively. Like all loans, there may be an adjustment for having a new loan on credit but there’s nothing that impacts it negatively.

    I do worry that from your scenario you likely have PMI, which no lender will refinance a PMI loan that isn’t currently with them and I’ve confirmed on many occasions that Chase will not refinance their own loans with PMI. Do you have PMI on your loan?

  • Matt

    Yes we do have pmi….do we have any other options??? Thanks

  • Matt,

    Since you have strong credit, you may be able to get an unsecured line of credit. Key Bank had these up to $30k the last time I checked.

    If you used that line of credit to cover the shortage, you can do a FHA loan up to 97.75% of the appraised value. You’ll have two loans instead of one but I know the payments will be less than what you’re paying now.

  • Oscar

    Hi Keane,

    Thank you for the information. Both the first and HELOC are with Chase (pka WaMu). I have myself in a real pickle. I pay ~$1782/mo. on first. I pay ~1K/mo. on locked portion of HELOC, and pay ~100/mo. on unlocked portion of HELOC which is mandatory. Then I pay another $400/mo. on unlocked portion of HELOC to reduce the principal. First mortgage has ~22.5 yrs. left, and locked portion of HELOC has ~15 yrs. left. Not sure how long I have on unlocked portion as I’ve been paying $400/mo. principal in addition to the IO payment. Rather than having 3 payments a month totaling like $3300, I’d like to reduce the monthly payment to one payment with a fixed term and interest. Then, if I want to pay it down sooner, I can just pay extra principal on the one payment. With the job market the way it is, I’d prefer that flexibility. Let’s say something like a 30 yr. fixed where I can have a lower monthly payment, but pay additional principal each month. Then, if I have a bad month or lose my job, I can pay the actual monthly payment, and just skip paying additional principal. Does that make sense, and is that possible? I realize I might have a slightly higher interest rate for a longer term, but I’d rather have peace of mind knowing that I should always be able to make the payment each month. If it doesn’t make sense to refi or find a more creative alternative than my current scenario, I’ll leave it as is making all of the separate payments. I would just like to be able to combine them all and have a lower monthly payment, but with the first at $283K balance and both loans in the HELOC totaling ~155K, I know that it may limit my options. Thanks again, Keane, for your trusted advice and assistance.

  • Oscar,

    Your pickle isn’t quite so bad. The majority of your balance owed is on fixed terms on decent rates.

    I’m going to throw you a completely different curve ball. My hunch is that your goal is to pay down the house faster since you pay so much extra principal. One problem is your locked HELOC rate is good for a 2nd position mortgage but still high compared to today’s rates.

    You can always pay more principal but need flexibility too, correct? Also, extending your terms may not be something you want to do but are willing to do to get all the loans on a single payment that’s fixed.

    One problem you face is that conventional financing only allows you to go to 80% of your home value if you want to combine your mortgages and your combined value must stay under 95% (HARP does not allow the consolidation of these loans).

    Here’s what I would do. Do a FHA 15 year fixed mortgage up to 90% of your home value, which is about $395-400k. This will pay off your existing first mortgage and the locked portion of your HELOC. FHA Rates are at 4% (4.651% APR).

    The reason I suggest this is because FHA allows you to go to 90% of your home value AND pay off a portion fo the second. Also, FHA 15 year fixed mortgages do not need mortgage insurance at 90% loan-to-value or less.

    It won’t reduce your payment but your payment will barely increase while knocking 7 years off your first mortgage and keeping your second on track with 15 years left. I would use your Roth to cover any costs needed at closing.

    Here’s an example. Your appraisal comes in at $440k. You can then finance 90% on a FHA at 4%, which is $396k. You owe $283k on a first and your locked HELOC is $114k, which is $397k. You use your IRA to pay the principal difference and closing costs.

    Your new first mortgage is now $2929 vs. $1783+$1000. That’s $147 more a month. However, your locked HELOC portion is not extended and you’re shaving 7.5 years off your first mortgage while still keeping your payments under $3300. Here’s what it would save you:

    $147 more per month for 15 years (180 payments)= $26,460 over the life of the loan

    Removing 7.5 (90 payments years on your first mortgage at $1,782 = $160,380

    FHA loans have expensive upfront costs, so let’s say your total cost is about $14k.

    $160,380 Savings from first
    -$14,000 Cost of new loan
    -$26,460 Additional payments made

    $119,920 Savings

    The reason this loan saves so much money is because it’s not extending your term and it’s lowering the rate for both mortgages substantially. It’s a nominal increase in your payment to see huge amounts of principal reductions on your loan (much faster than your current process). Since it’s only raising your total obligation $147 a month, you can still pay down the unlocked portion $253 a month on the same budget.

  • Oscar

    Thanks again, Keane. That all makes sense, and I like the idea, but I got lost on one point in there. I kept reading and re-reading, and it seemed too good to be true. What happened to the unlocked portion for which I still owe $41K? Yes, if I am very lucky, the house may appraise for $440K in which case 90%, as you mentioned, would be $396K. That would, indeed, just about take care of the first (283K) and locked portion (114K) of HELOC (~397K for which I could likely come up with the extra money and closing while saving big $ over the life of the loan). But I still have this nagging issue of the unlocked portion of the HELOC at 41K for a total HELOC balance of $155K. I’m not sure what I may have missed in your previous message or what I may have misunderstood. Thank you again, Keane, so much for all of your help.

    The principal I’m paying now at $400/mo. is to reduce the principal amount on the unlocked portion of the HELOC which was originally $50K. It is an interest only portion of the HELOC currently at 2.74% which has run right around $100/mo. give or take a few bucks. If I weren’t paying that $400/mo., the balance on that loan would still be $50K until the bank tells me to start paying the piper. I call periodically to see what the lock rate would be, but Chase always quotes me like 8.9%. I have no idea why it is that high given I have a first at 5.25%, one lock on the HELOC at 6.44%, and excellent credit. I won’t lock it that high because it makes much more sense for me to pay the principal down on my own separately while letting the interest stay at 2.74%. While it may be a bummer to have such a horrible economy, the bright spot is that the interest rate on this portion of the HELOC has been at 2.74% for a couple of years. When Chairman Bernanke changes his mind, I don’t know what will happen. I wish I had the funds to pay off this portion of the HELOC (41K), and refi into one loan, but I don’t have that kind of funds. If I am better off with my separate payments totaling $3,300/mo. now than doing anything else, then so be it. My only concern will be when interest rates rise. Given that my 41K balance is the smallest of my loans, when it rises, I won’t like it, but should still be able to pay it. I pay an amount of principal on it each month now where I think I would have to pay in total if I have to lock it in north of 8%. Thanks again, Keane, for all of your advice.

  • Gabriel Furnari

    My house was purchased in Arizona in October of 2005 for $299K with a 5year I/O ARM w/20% down. No PMI. Current interest rate is 6.25% which is scheduled to adjust in December 2010. The margin on the note is 2.25% and has a rate cap of 12.25%. There could be no more than a 2% rate increase between rate adjustment periods which will be based on the 6 month Libor Index as posted in the WSJ. My current mortgage balance is $240K. I have a Freddie Mac loan. The approximately value of the house is $185,000. I am “underwater” or have negative equity as you can see, and with property values declining I will be in a worst position before too long. I am current with all my payments.Fortunately, I am currently employed, albeit at a reduced income than my previous job.I am trying to refinance at today’s lower rates. I want to use a different service provider than my current one because they have not been much help. I have tried banks such as BofA, Chase, and M&I Bank with no luck. The answers that I have been given suggest that I have to be an existing mortagage customer of the bank or that even if I were an existing customer of the bank they would not do a HARP refinance with a LTV greater than 105%. Would this scenario suggest that I am only left with a cash-in refinance in order for the banks to work with me? Can you please advise me of any other refinance scenarios? Also, would you be able to determine what my montly payments could be after the loan resets given the above information?
    Thanks Keane for any assistance/suggestions that you can provide to me.

  • Oscar,

    You’ve got most of the idea. The remaining $41k would remain unlocked and subordinated behind the new FHA loan. FHA does not have a CLTV limit and there are no price hits for high combined loan-to-value like HARP loans. You would have two loans.

    That’s why your payment will be fractionally higher than what you’re paying now. Your new first mortgage would be $147 more a month compared to the locked HELOC and current first mortgage payment. Since you pay $400 more anyways, you can still apply $253 towards the unlocked portion of the HELOC. Yes, it’s less on the adjustable portion of the loan but you are correct in that it won’t affect your budget too much as you pay that down.

    It’s worth it for the amortization of a 15 year loan at 4%. The amount of principal you would pay on the new first mortgage is much, much more than you’re currently paying which is why you would be scheduled to save almost $120k over the life of the loan.

  • Gabriel,

    You’re correct in that most lenders will not exceed 105%. Especially in Arizona.

    Some lenders will go to 125%. If your credit and income look strong enough, you just have to keep searching. If it’s truly unavailable, you can try to do a FHA short-payoff refinance.

  • Marlon

    Update and disappointment in my current HARP refinance…

    On July 2, I got a GFE from Flagstar with 4.99% at 0 point, then signed a “floating agreement” document. This is using their “no appraisal” HARP program.

    Then on July 8, the Flagstar agent told me this:

    “The rate today is 4.99%. I will lock it if you instruct me to do so with an email response.”

    To which, I responded:

    “OK. Lock me in at 4.99% then.”

    The Flagstar agent then confirmed by saying:

    “I locked you at 4.99%. Unless you want to buy it down to 4.875% (.5 or $1,632)”.

    Fast forward to today, and I got this:

    “We quoted a rate of 4.99% at application hoping that the rates would drop to that rate during the loan process. They stayed the same throughout the process while we we floating your rate. Since we are at the “clear to close” stage, I have locked your rate at 5.25% for “0” points or origination. This rate is exactly what the rate was at “0” points when we began the loan process. Your pricing that determined your rate is directly affected by your loan to value of 91% and your combined loan to value of 101%. I have attached the re-disclosed GFE and TIL per the new Federal Lending guidelines that address the changes. *** ****** will be contacting you about closing procedure shortly. ”

    Obviously, this is very irritating because without an appraisal, they should have been able to compute at the very beginning my CLTV and all the adjustments. So I assumed that their GFE already took those into consideration.

    Any insight into these things? Is the lock binding?

  • Marlon,

    I can almost guess exactly what happened.

    I’m about to write a blog about the manual underwrite version of HARP Fannie Mae loans, which is what I’m assuming you were working on. If you’re applying for a HARP loan with your current servicer, they don’t need an appraisal but they DO USE AN AUTOMATED VALUE APPRAISAL. This is a software program that gives a value based on sold comparables. Think of Zillow.com Zestimates as an example.

    The truth, the no-appraisal Flagstar option offered to you was based on an estiamted value that the loan officer ALWAYS KNEW ABOUT. Just because no appraisal is needed doesn’t mean that they can go to whatever loan-to-value they please. I’ve confirmed that Bank of America will go to 105% of the value with no limit on the second on their manual underwrite HARP/Fannie loan. Flagstar goes to 125% on the first.

    As for your situation, I bet I know exactly what happened. The loan officer priced your loan using the 91% loan-to-value. HARP loans up to 95% have VERY good pricing. Today, my rate on a Fannie Mae HARP refinance at 95% value or less is at 4.5% (4.551% APR) or 4.625% (4.644% APR)with no points.

    The loan officer probably forgot to calculate the price adjustment for COMPLETE LOAN TO VALUE (also known as CLTV, which exceeds 100% of the home value. This would yield approximately a .25% increase to rate if you want to keep a zero point loan, which is exactly what you’re being quoted. He/she is blaming the value but if they knew about the 2nd all along, then it was an error of the loan officer when quoting initially.

    The key to holding them accountable is your disclosures. If your initial disclosures showed the 2nd mortgage existed and was being subordinated (the application would show the existing loan amounts on the property on the first page and third page), then they always knew about it. The regulations for the new Good Faith Estimate only allow the lender to change if there is a qualified “Change of circumstance”, which a lower appraised value IS a requirement but if you have any proof they knew what the value to be used was always the same, then you can hold them to the pricing. The unfortunate news is they always have the option of just saying “No”.

    Also on the 3rd page of the application is the estimated value of the property in the “Real Estate Owned” section of the form. Look to see if that value there is the same as disclosures for the new terms. If you don’t have disclosures for the new terms, have them send them to you including the 1003 application, Good Faith Estimate and Truth-in-Lending. The 1003 application is the only thing that will show the estimated value of the three forms.

  • Marlon


    I’m still trying to figure out where to find: “2nd mortgage existed and was being subordinated (the application would show the existing loan amounts on the property on the first page and third page)”

    In the original “Uniform Residential Loan Application” (I don’t have the revised one yet by the way), the value of “Real estate owned (enter market value
    from schedule of real estate owned)” in page 2 is set to “380,399.00”.

    If they did not change this value, I should be at a CLTV of 93.8% (and not the CLTV of 101% that they are now claiming).

    Btw, the credit line on the HELOC was reduced to $35K (whereas it was $65K before). I informed the Flagstar agent about this before he gave me the original GFE (although the actual reduction time might not have happened before the GFE).

  • Marlon,

    I’m hoping I have your answer.

    93.8% of $380,399 value is a combined loan amount of $356,814. This is likely the amount of your first mortgage AND the $35k line.

    If you add $30k to this (The original $65k line limit), your combined loan amount is $386,814.

    $386,814 combined loan amounts
    / $380,399 value
    = 1.016 or 101.6% Combined loan-to-value

    Are you sure they’re not using the original line limit? Some lenders are very picky about using modified Home Equity Line limits for combined loan-to-value.

  • Marlon


    That is also a posibility. Actually, what happened was:

    1. I was talking to Agent1 at Flagstar who gave me a quote of 4.99% at 0 pt. He also gave me a quote of 4.875% but on a 30-day lock instead of 45.

    2. Then I had a hard time reaching Agent1, so I went to Agent2 at Flagstar who quoted me 5.0% at 0 pt but with the condition that credit line on HELOC be reduced to $35K.

    3. I signed a HELOC modification agreement for credit line reduction (June 29).

    4. On July 2, Agent1 called me back saying he will handle my loan instead of Agent2, then gave me a GFE of 4.99% with 30-day lock (not 45 day). I then locked at 4.99% on July 8.

    5. Then today, after a few weeks of emails and documents being signed/sent (involving another person from Flagstar), I got a new GFE from Agent1 but now it’s at 5.25%.

    So to me, this looks like they are pretty aware of my HELOC situation. I would think that since the original GFE (dated July 2) was made much earlier, it would have a higher chance of not taking the credit line reduction into consideration. The latest billing statement on my HELOC dated July 20 already reflects the credit line reduction.

    I do get your point that maybe they are still computing the CLTV using the old credit line (but that seems contrary to the intent of Agent2 when she said I should reduce my credit line).

    Thanks so much.

  • Marlon,

    I don’t know. The person who currently quoted you the higher cost was not the person who told you to lower the line. If they just picked up the loan file, they would see the $65k line limit.

    I know that if they did a no-appraisal Fannie Mae Refi Plus streamline that the value in question was determined early on and never changed. So if the value was the same, how did we go from 93% to 101%? You have documentation that says you’re at 101% (old line limit) and new documentation that shows 93%.

    I might be just telling you how to tell Flagstar agents how to do their job, but everything I see says you’ll probably be able to get the loan you want by simply telling the 3rd person (And showing them the documentation) that the line has been reduced. There is a chance that Flagstar will not consider your new lower limit because it’s not on the original note, since some lenders do this. If this were the case, then the advice to pay down the line from the earlier agent was bad advice since Flagstar never was going to adjust their CLTV if you did so.

    I know I’m being extremely presumptuous, so I could be wrong, but everything points to lack of detail and too many people working on the same loan. I think (and hope) that it’s just a clerical issue that can be fixed with my suggestion and you end up getting the loan you hoped for.

  • Oscar

    Thank you, Keane, for everything! I am going to actively investigate the FHA financing, and will follow up with you on what happens, or if I have additional questions. It is a pleasure communicating with you.

  • Oscar,

    You’re welcome! Just for kicks, let’s see the amortization schedule for your existing 1st mortgage and see how much principal you’re currently paying. I’ll do the same for the locked HELOC amount. Add the two together plus the $147 extra in principal you would be paying to the unlocked HELOC (since the new 15 year loan would be taking $147 of your budget going towards the unlocked HELOC) and compare it to the principal you would pay on the new 15 year loan at 4%.

    Based on the figures you gave me, I came up with the following:
    1st mortgage principal $550 ($283k owed, 22.5 yrs left, 5.25%)
    Locked HELOC principal $377 (114k owed, 15 yrs left, 6.44%)
    Payment difference $147
    Total $1074

    Principal payment on the FIRST payment on a 4% 15 year loan at $396k- $1609

    That’s a $535 increase being paid towards principal on the exact same budget! That’s a huge amount of savings. It only takes 5 1/2 years for the principal payment on the new 15 year loan to exceed $2,000 a month, which is crazy since the payment is only $2929 a month.

    Good luck and keep in touch on your progress.

  • Kim

    My loan is owned by Fannie Mae. I have PMI. I would like to refinance with HARP with 125% LTV. The servicer of my loan is not a lender, so they can not refinance my loan. I have contacted 12 other lenders and none are able to do a 125% loan unless I am an existing customer.

    I was told that the servicer of my loan obtained thousands of loans last month. I know I am not the only one in this situation.

    I have contacted Fannie Mae and my MI company. They are of no help. I would like “the powers that be” to fix this problem with HARP. Any suggestions?

  • Kim,

    Your guess is as good as mine. Write your senators, the Federal Reserve, anybody you can think of.

    There was a time when subordinating 2nd mortgages were equally as difficult. Not anymore. The day we can do HARP loans with PMI will be a good one. It’s the last major hurdle we face on these loans.

    Stay in touch and let us know if you get any traction.

  • pete

    Great information.

    I’m currently pursuing a HARP refi with my current lender, Chase. My loan is a Freddie Mac loan, about 300k balance. We have an escrow account with the loan that currently has a balance of $6k. However, on the GFE, they are adding this balance to the loan amount to “re-establish the escrow,” and I am to supposed to receive a credit back for this amount during closing. However, this causes the balance of the loan to be higher than it should be. In other words, they are charging me interest (about 40 bucks a month) on my hard earned money! Can they do this? How do I negotiate this with them?

    Thanks in advance!

  • Pete,

    First, they can only raise your loan amount $5k to cover costs and escrow reserves, so I don’t think they can even do it the way they suggested (This is for Freddie Mac HARP loans).

    Your credit comes in the form of a check post-closing, not during closing. When I have clients who don’t want to roll in these new reserves, they just bring money to closing to build the new account. Since you don’t make a payment the month you close or the month after, you can use the money you have budgeted for next month’s mortgage payment to cover this. Maybe put the remainder on a credit card then pay it off when you get your escrow refund.

    Just have the loan amount lowered and do as instructed above. Good luck!


  • Steve

    Mortgage is with BofA, LPMI, 6%, 95% LTV and with falling home values, the appraisal may be closer to the loan balance. Loan balance is about $290,000. We have no late payments over the last 12 months and credit score is 750+.

    Even though it appears we are great candidates, it sounds like BofA might still refuse to refinance. I have seen you suggest going to other lenders – but I have read that I can only do this through BofA (maybe because of LPMI?).

    Could we do the HARP with another lender if BofA turns us down – or are we limited to trying to get a FHA to reduce our interest payments?


  • Steve,

    Your PMI is your brickwall. Only B of A can do your refinance and they are still not doing HARP loans with any form of PMI. FHA is one option. You can also do a regular conventional loan at 95% as well with either LPMI, regular/monthly PMI or a single-financed PMI (since your credit is so high). A conventional loan at 95% loan-to-value will likely need your debt ratio to maintain 41% or less to qualify.

    If the ratios are higher and/or you need 97% LTV, FHA will be your loan of choice.

  • Steve

    Thanks – just did a personal credit check and it is better than I thought – TransUnion 914, Equifax 803, Experian 928. What debt ratio are you referring to (you mention 41%)? And can I get FHA from anyone or am I also limited to B of A?


  • Steve

    I think you are referring to income to debt. If so it would be roughly 35%.

    Are you suggesting conventional loan over FHA if the ratios are 95% or below? (Although I believe the value of the house has gone down to make the LTV over 95% now).

    Thank you,

  • Steve,

    Yes. Debt ratio = Debt-to-income ratio= income to debt ratio. All the same :) The percentage is calculated by taking your gross QUALIFYING monthly income and dividing it by your total debt expenses.

    With your credit, you should consider conventional financing at 95% and FHA if over. Any lender can do both. You are not limited to your current servicer.

  • Wei


    Thanks for the very informative posts. Can you explain where in the loan documents is the LPMI stated? We took out a loan with B of A in 2008 using their “No closing cost” program at the time. They paid a big chunk of the closing fees and didn’t charge PMI on our mortgage (10% downpay on a $450 house). Rate was 6% fixed. Now the principal is paid down to $340 however the house is probably valued less. I tried to do a HARP refi with them but keep getting conflicting information. Some say there’s LPMI on the loan while others say they don’t see it. I looked for the LPMI in the loan doc but see none. Dealing with B of A has been a trying exercise to say the least — they either don’t know what they are doing or don’t care. Maybe both. Any help?

  • Wei,

    I remember those advertisements. Your loan does have PMI. LPMI means it’s paid by the lender. The rate you have was probably higher than the market rates at the time, which earns B of A enough money to pay the premium. It’s unfortunate, because this is never really explained thoroughly to the client. Nobody ever thought it would be detrimental to the client until this happens.

    This is why it’s so vital that existing servicers refinance their clients with mortgage insurance. Only B of A can do it but they won’t. Here’s my first post on that topic:


  • Melanie

    Hi Keane,

    Let me just say that after nearly a year of trying to refinance with my current lender, B of A, under the HARP program, your postings have given me more information than they have in 50 phone calls. I am still employed,(thank God!), but have a mortgage balance of $268 with home valued at $200-$215. Countrywide originally sold me my loan with no money down with LPMI and 7.25%. I thought it was an okay deal at the time in 2007, but now BofA says they “can’t” refinance me because of the LPMI even though they made it seem as if it was the best deal possible just 3 years ago. My credit score is 720+ and I haven’t missed a payment. But they have given me every excuse from “since you still own your first home, you are an investor and they are not covered under the program”(side note, they service that loan too!) to “we are not allowed to refinance you because you have PMI”. Please don’t tell me that I have no choice but to keep trying to work with these people when the new program guidelines are released. I am holding out hope that I can take my credit and timely payments elsewhere.

  • Dan

    I am looking to better understand how these programs work, what exactly is the HARP program doing, does it guarantee the loan in some fashion?

    My frustration is the additional points or higher rate associated with being underwater. I live in the Detroit area where more than 30% of homes are upside down. I have a balance of $200,900 and a recent appraisal of $168K (in which they used recent foreclosures as comps). My credit score is over 800, my current lender is GMAC and my loan is owned by Freddie Mac. I have a rate lock and approval with my credit union that expired July 15, but now my credit union will not re-lock or honor new market rates. The contact at the credit union has been a disaster to work with, takes days to respond to even simple questions, which has delayed this whole process. I am reluctant to move forward with the credit union under the current terms because I don’t think they know what they’re doing and I am going to end up with a nasty surprise at closing. My issue now is I cannot find anyone else willing to work on this with anything less than a full percentage point penalty.

    I find it hard to believe that this is how the program was intended to work, and i just want to make sure I have the ammunition to negotiate with these different parties if they are intentionally or unintentionally misstating facts.

    Once a lock has expired, why would an originator not be able to start over at new market rates? Had rates gone the other way they most certainly would have raised the rate.

  • Melanie,

    Read the blog post I linked for the person before your comment. Unfortunately, B of A is the only lender who COULD help you but they’re not doing these loans. I’ hoping this will change.

    That said, if you have good credit, I would see if you can get an unsecured loan + a FHA loan up to 97% of your home value and see if that works. You could also try to use a 401k loan if you have a retirement account.

  • Dan,

    It’s unfortunate that you’ve had a bad experience. Your situation is a common one.

    Lenders LOSE money when loans do not close and it’s a common practice to only offer market pricing plus extension fees if not closed on time. That’s why it’s important to only lock when you know you can close and fulfill the lock period. The lender should not be able to raise the rate if you close during that lock time.

    If rates dropped enough, the lender can do what’s called a “negotiation” and drop your rate down from where it’s at but rates must improve quite a bit for most consumers to qualify. HARP loans typically do not price more than .625% above the best 30 year fixed rates regardless of loan-to-value, but they are more expensive if you’re underwater. Most HARP lenders price their best HARP loans .125% higher than their best conventional 30 year fixed rates and there’s a cap the government implemented that doesn’t let your rate exceed approximately .5% of that rate. What this means is if your lender is offering 4.375% on their best 30 year fixed, they will likely offer 4.5% for the best HARP loan and never charge more than about 5% regardless of credit and loan-to-value.

  • Dan

    Regarding your last point – I am dealing with lenders who are quoting 7/8 more than best rate on 30-year, and 1% more on a 15-year mortgage. Are these lenders in violation of the government cap that I should call them on it, or is it not as cut and dry as that?

  • Dan,

    They’re not in violation of the cap. They could, if they wished to, keep all of the extra margin related to the price cap. There’s nothing that states a direct lender has to control their margins on in-house loans. Not only that, but from what I’ve seen, the loan officers you deal with are not always the ones who make money on this cap. It’s often just the company they work for.

  • antman

    Thanks Keane! I’m using your advice which is awesome and FREE!

    If I may offer some to you, perhaps you should remove your birth year from your facebook badge. As you probably know full DOB and name leads those who would want to steal one’s identity a step closer to doing so.

    Thanks again for your knowledge! PS No offense but you sure are one lucky married man!

  • Antman,

    Yeah, I guess full DOB is not a great thing to have on the web but honestly, I monitor my ID so closely that nobody could ever do something without me knowing. Thanks for the tip though.

    No offense whatsoever :) I appreciate the compliment.

    Good luck!

  • Helen

    Hi Keane,

    regarding the latest HUD release on the FHA refinancing for underwater borrowers, why does no one in the mortgage industry know about this program yet. So frustrating – I just spend 2+ hours on the phone with Wells Fargo and no two individuals gave the same information, if they even knew anything about it. Any suggestions on how to approach this with our lenders, what can we say that will help them understand what we are talking about? Also, you mentioned a cap on the mortgage amount. Does that mean the amount prior to the refinance or after? For example, our first is 432K and our second is 92K – if they were to reduce it to the 115% listed in the guidlines, the total would be less than 400K. Both our loans are owned by WF. Thanks for the advice!

  • Helen,

    Even I know very little. I have the guidelines and the news reports but have heard of nobody participating. What really sucks is this new program is changing ALL FHA guidelines so people who do not get principal write-downs on their balances can no longer exceed 100% CLTV on FHA loans. This ends up hurting as many people as it can help.

    Your best bet is following up here and getting my updates. I’ll be updating regularly.

    You should be eligible for HARP or a regular FHA loan. I would at least order a FHA case # with a lender now so you can take today’s guidelines. You can still revert to new guidelines later if you wish but ordering a case # now will allow you to take today’s guidelines if needed.

    As for how the write-down happen, your first cannot exceed 97.75% and your second cannot exceed 115% with both loans combined.

  • Erik

    Hi Keane,

    Thanks for all your helpful information. We have a mortgage with PMI with CitiMortgage and I called and they are willing to refinance under HARP. I was initially excited, but I am skeptical of the closing costs. They are saying that closing costs will be $6,000 and they require a $450 application & appraisal fee. Is this high for a HARP refinance?

    Also, I am worried that our appraisal will come back low and that they will give us a higher rate. They asked me to guess on the value of the house and I said $170,000 because a similar home on our block sold for that recently. The problem is that we also have a few foreclosure homes on our block that are selling for $49,000. The Zillow.com estimate came in at $97,000 for our house…

    Our original mortgage was $181,000 and we currently owe $170,500. Our current rate is 6.375% and Citi offered us a rate of 5.125% for the refinance.

    Should I wait on the HARP refinance to see if the FHA refinance program is better?

    Thanks for your help,

  • Erik,

    Do you have a Fannie Mae or Freddie Mac mortgage?

    Ask if the value pertains to the price and what minimum value they need. HARP allows up to 125%, so I’m guessing they need a value of $137k or more.

    Also, make sure the $6k in costs is true closing costs and not your prepaids. $6k of just fees is absorbantly high but I have a feeling it’s not all fees.

  • Hello Keane,
    Came across your site (nice to see your local too!) and looking for advice and assistance if you would offer it! :)

    We have a home loan through B of A and we are currently underwater. We have a 40 Year 7% Loan with PMI and with 258k remaining. Our area houses are going for 200ish. We would like to refinance.

    We called BofA and they said since we have PMI, they will only go up to 105% and not 125%.

    Are we stuck? We have credit scores above 800 and no other credit card debt. Only the underwater house.

    Any ideas or help?

    BTW, if you want to chat via phone, please let me know!


    Marysville, WA

  • Erik

    Good Morning Keane,

    We have a Fannie Mae mortgage. You are correct about the 125% of the value, but it sounds like the worse our LTV ratio is, the higher the interest rate will be. I am worried about a low appraisal raising the interest rate that we qualify for with the refinance. That is why I am wondering if I should wait for the FHA program you are talking about.

    Here is how the $6,000 in closing costs works out.

    Origination charge – $790
    Charge for interest rate of 5.125 – $1,273
    Service (appraisal, flood certificate, etc. – $427
    Title services and lender’s title insurance – $1,392
    Government Recording Charge – $92
    Transfer taxes – $490
    Initial deposit into escrow – $669
    Interest charges on loan for first 30 days – $744
    Hazard insurance – $103

    Total = $5,980

    Do these fees seem reasonable for a HARP refinance?

    Thanks for your help,

  • MS


    Any thoughts on the ‘Mega-Refi’ that is making the news lately.. all big heads are discussing this topic which could impact positively all of us ‘Underwater borrowers’ – seems like.. Please share your insights into this please…

    Thanks, – Muthu

  • Chase,

    This is the 2nd comment I’ve seen where B of A had offered somebody a PMI HARP loan at 105%. I’ll request info from a contact I know there. I hope this is correct!

  • Erik,

    It’s reasonable. The 30 days of interest, deposit in escrow and hazard insurance are not fees. You’ll get all of that back when you skip a payment and get your escrow refund. You may be able to do better but it’s not that bad with all things considering. The lender fees are relatively low, but I don’t know your loan amount. Either way, it looks fine.

  • Muthu,

    The new principal reduction loan through FHA could be a big help but I don’t know a lender who does them. Plus, with the introduction of this program, FHA no longer can go above 100% of the value of the home on a second mortgage. That was a great option for non-Fannie and non-Freddie loans that were upside down. From what I can see, we’re taking one step forward and two back. It will always be difficult to negotiate a lender to take less than what they owe. The process will likely be the same or worst than a short sale since the reduced payoff will behandled by the same loss-mitigation departments. All of these homeowners who have not gone through a short sale will learn quickly why it’s so difficult facilitate.

  • Vincent

    Hi Keane,

    Great info. Appreciate your advice on my situation below:

    1st mortgage: 280K (5.5% 30yr fixed) owned by Freddie Mac serviced by CitiMortgage
    2nd mortgage (equity loan): 100K (7.0% 30yr fixed) serviced by CitiMortgage

    Current house value is approx 340K. A few lenders rejected my application to refinance since my combined LTV is 109% and I’m not under hardship to repay. Am I a good candidate to apply for HARP or FHA program you memtioned? If I am, pls recommend a few lenders that offer HARP or FHA program.

    Thx in advance for your help,

  • MS


    Sorry to share my experience ahead of Keane. Of course Keane is the expert – I am just a consumer like – i was in a similar situation like you minus the 2nd loan with CITI – I ended up REFI’ing with them under HARP for a new lower rate of 5.5%! So since you are starting at 5.5% I am curious how much lower CITI can offer to take you under the HARP umbrella? Please share your experience once things start rolling…. From my little experience I could tell you are a good HARP candidate ..


  • Vincent,

    A few tips, first, have your lender order a FHA case # EVEN IF YOU WANT A HARP LOAN. FHA is changing their guidelines and any FHA application with a new case # ordered on September 7th or later will not allow a 2nd mortgage to exceed 100% of the home value unless it’s a principal reduction loan. If you order the case # now, you can go either way and will be grandfathered into today’s guidelines.

    What kind of loan are you seeking? Another 30 year fixed? With good credit, you should only have one price adjustment that should take you around the middle to high 4% range on today’s rates. FHA doesn’t have a price adjustment for loan-to-value so you can get closer to middle to lower 4%’s depending on your lender but you will be subject to mortgage insurance where the HARP loan will not require you to take mortgage insurance.

    MS is right in that you’re criteria fits. The only thing you’ll want to be mindful of is how long you plan on being in the house and what kind of costs you’ll pay to get a rate that makes sense for you. Your rate isn’t bad, so you do need a rate in the middle to lower 4’s to probably make sense or a rate at least .5% lower that has very little to no fees. It all depends on how long you plan on being in the home. Just remember you cannot refinance a HARP loan with another HARP loan, so whatever you get this time will likely be your last loan on this house.

  • MS,

    Don’t worry, your contributions are appreciated! I don’t know everything. I gather my data from my experiences with customers, colleagues both in my company out in other companies and from customers like you. I won’t say I’m excited about the new program because I see coherent problems that could create a lot of redtape and end up just like the HAFA short sale program. Sure it helps, but not at the expense of turning down a ton of customers and putting everybody through a long and painful process. The problems I see are similar to those on short sales since lenders will be working with the same loss-mitigation departments at lenders, which is not an easy task. Even more difficult when there’s two loans underwater, mortgage insurance or both. HARP may not be perfect but the only hurdles we face is PMI and 2nd mortgage subordinations, which most are going through with the 2nd mortgage subordinations now.

  • Vincent

    Keane- Thx for your insights. My thinking is to consolidate the 2 loans together (1st mortgage and equity loan) and go with to either a 15 yr or 20 yr fixed. Can I do this under the HARP? Rates I found for 370K loan are 4.75% with .305% pt for 20 yr fixed and 4.375% with .491% pt for 15 yr. Are these rates reasonable? Thx again.


  • Stan Minkus

    I currently have a loan serviced by Litton Loan Servicing. My payoff is $223,000. I started the process of refinancing two weeks ago and had an appraisal done. It came in at $205,000. I was told that my home is DU Refi Plus eligible with no MI, but the lender I was working with said they could not go above 105% and I do not have the $12k to close the loan. Litton told me that they only service loans and do not do any refinancing. A 5.25% loan would save me $260/month. Do any lenders actually go to 110% ltv on one mortgage for this program? I had an FHA appraisal done that I believe can be transferred.

  • Stan,

    What state are you in?

  • Stan Minkus

    I am in North Carolina.

  • Stan,

    I’m not sure if 53rd Bank lends in your state, but I know they went that high on loan-to-value.

  • Stan Minkus


  • Shelley

    great website, thank you. I have been trying to contact fannie mae directly but is impossible. Hoping you can assist:
    We currently refi-ed about a 16 months ago with national City (now PNC) to a 30 yr 4.875% motgage. 1st mortgage was 400K, 2nd (equity line) was 16k. No PMI. Value (then) of house was 500k. The 2nds has been paid off and we dont care if we keep it.
    We are trying to refi to a 15 year at about 3.75-3.875 under HARP. I have been getting conflicting info from the 2 brokers that we have been trying to work with. Our value could be down significantly (75-100K) based on what the neighbors have been getting back. We have about 20K we plan to put at the mortgage regardless. Credit scores are excellent, income is sufficient.

    Question 1: If our LTV is >80/20 are we required to escrow the taxes or home owners? [one broker says yes its law (although i can find nothing to support that comment); the other says as long as we are 90/10 LTV we will not have to escrow]
    Question 2: We started the refi process last Jan 09 but becasue of delays at National it took months to get thru the process. are we truly ineligible for HARP because of the timing of the closing with National City (April 09)?

  • Shelley,

    Some states do have provisions requiring escrow. Is this a big conern of yours?

    Your loan must have been purchased and securitized by Fannie Mae by March of 2009 or May of 2009 for Freddie Mac loans. Which of the two do you have? It’s very close, so it’s less likely.

    One trick you can do as an alternative is explore FHA. FHA 15 year loans do not require mortgage insurance at 90% value or less, so if you can buy it down to that loan-to-value, you can explore that option. Especially if you find out you don’t qualify for HARP due to the securitization date. FHA does require escrow impounds though.

  • Daniel

    Keane, Here is my situation (State Florida):
    Current loan balance is 259K @6.85% 30 year fixed (26 years left), owned by freddie mac and serviced by BoA. No PMI. No Escrow. Estimated appraisal value is 180K. Excelent credit scores.

    I read about the upcoming sept 7 short refinance, what do you recomend and what are the steps to follow. Where do i start?

    My biggest concern is how to get the current lender to write down at least 10%? Is my current lender freddie mac?


  • Daniel,

    This program is getting a lot of attention, but I don’t have any reports of a successful refinance yet.

  • Craig

    Hi Keane,

    I have a question. I am trying to get a HARP loan. I currently have a Freddie Mac loan. I have a 93% LTV but my lender says that since my CLTV is over 95% (I have an equity loan) that I have to pay a premium of .375% added to my rate. Is this correct? I thought for HARP they only looked at the LTV.

    Also in my current mortgage I do not escrow my taxes and insurance however he says that if my LTV is below 80% I now have to escrow with my new HARP loan. Is this true? I thought under HARP everything about your loan stays the same but the rate.



  • Kevin

    I’m lost on wether HARP can help us and what is possible. Any thoughts?

    Chase originally mailed us a letter to say we qualify for HARP. We tried and were denied with a cryptic letter saying our income disqualifies us; at the time I had a 15% cut and my wife was out of work. We tried again, my wife had part time work and the new excuse was the ratio disqualified us.

    This is our first home, purchased at 184k and we know owe 164, but the local estimates for our home are roughly 152k. I’m not sure why we are not qualifying, since this is our only debt and we are at minimum 8% over the estimated value. I assume it is the PMI and the Lender’s willingness to do a refinance or modification.

    By the way, our loan statements are coming through LBPS instead of Chase. ANyone have experience with LBPS?

  • Lindsey

    Hi Keane –
    My loan officer at SunTrust said that because of the original loan I took out (95% LTV with no PMI but a higher interest rate) they will only refinance if the LTV is 97% or less and they are estimating my property to be more like 100% currently. She said there were no other options for refinancing. Isn’t the purpose of HARP to be able to refinance up to at least 105%? Does the original type of loan that I took out make me ineligible to refinance anywhere or just with Suntrust? Should I contact other lenders and do you have any recommendations on ones that seem to be better at working with HARP? I am in Georgia and my loan is owned by Fannie Mae. Thank you.

  • Wren


    Our payoff balance on our loan is $275K and our real estate agent thinks our house would appraise around $250K. We are 4.5 years into a 30yr 6.25% fixed loan. We would like to refi but have PMI attached to our loan that is held by BofA (formally Countywide). We are hoping to refi, rent our house out and buy a new house with $50K we have in the bank. We have credit scores in the low 800’s and no other loans and zero credit card debt.

    Do we have any options or are we just stuck?

    Wren in California

  • Craig,

    Everything you’ve been shared is true. LTV and CLTV affect pricing. Loans over 80% do required impounds but I think there’s something in CA that doesn’t require this in CA, but I’m not sure.

    All of the price adjustments you’ve been quoted sound correct. Sorry, it’s not just LTV that affects pricing.

  • Kevin,

    Debt to income ratio may have been a problem but the PMI is definitely a hurdle that income cannot fix. The only confirmed lenders I know of that will do a HARP loan when there’s PMI is Wells Fargo and Flagstar, which which they only do these if they’re currently only serviced by Wells and Flagstar respectively. They won’t do other PMI loans.

  • Lindsey,

    I haven’t heard whether Suntrust will do loans with PMI. Your higher rate loan is really a “Lender Paid Mortgage Insurance” loan or LPMI. Even though you don’t pay PMI directly, the lender is and you see it in your higher rate. This small provision still prohibits you from doing a HARP loan with a lender who is not re-issuing the PMI.

    The 97% quote you got from your lender was probably referring to FHA, which allows 97.15-97.75% of your home value.

  • Wren,

    I hate to say it, but you’re currently stuck. B of A and Chase do not do self-serviced PMI loans yet. I’m hoping they’ll do them soon and 3rd party options become available because this is one of the last major problems we face with HARP. Sorry, but don’t give up. I promise I’ll be sharing the news if/when refinancing PMI loans will become available through these channels.

  • Geoff

    Would love to get advice on what our immediate next steps should be to get a REFI. I have not reached out to either of our lenders yet.

    – Owner Occupied home purchased we purchased in 2007 with current estimated value @ $536,211

    First trust – CITI
    30 Year Conv
    balance $475,476.53

    Second Trust – BOFA
    30 Years Conv 2nd Balloon
    balance $90,136.38

    – Neither loan backed by fannie or freddie
    – We’re under the FHA loan qualifying CAP for our area ($745,000.00)
    – LTV of ~ 106%
    – Current and never late
    – Wife and my Credit scores ~700

  • Randy

    We were pretty much ready to just walk away but I’m hoping this program could help us. If not, it seems like the best thing to do may be to go ahead and walk.

    We did an 80/20 deal with a first and second to purchase our home in 2005. We currently owe ~$437K on the first (5/1 ARM) and ~$103K on the second (15 year jumbo). Both loans are with Citi and are not Fannie Mae or Freddie Mac.

    We have shortsales and forclosures all around us that are not selling. According to a few websites our home is currently valued at about $268K. That puts us at about 201% LTV. The last time I checked my credit score was 790.

    How do I get this process started? Do I have any shot? Should I just stop paying the mortgage, pay off a couple other bills and let Citi eventually foreclose?

    Obviously, finances aren’t my strong suit.

    Hayward, CA

  • Tyrone Biggums

    Great guide, nice work.

  • Jarrod


    This is what I’m looking at. My current principal on my 30 year fixed loan is $216,000 and my house is valued at $193,000. This puts my loan to value at 112%. I have a lender paid PMI. My current servicer does not offer refinancing options and does not originate loans. It seems that since my L/V ratio is higher than 105% I must go through my current lender but I assume my lender is not my servicer. Do I have any options? I fear that my only option is to go through my current lender which I have no idea who it is. My loan is Fannie Mae backed.

    Jarrod from California

  • Geoff,

    I’m sorry I’m answering late, but the date I got your comment wouldn’t have made a difference. FHA would’ve been the solution you’re looking for but they lowered their combined loan-to-value to 100%. They used to not have a cap on the two loans together, as long as your first mortgage was at 97.75% or less.

    It sounds like it’s temporary though and will change around May of next year. We’ll see if the higher CLTV limits come back.

  • Jarrod,

    The only servicers I know that would do this loan is Flagstar and Wells Fargo, but they must be Flagstar serviced loans to get a new Flagstar HARP loan and same with Wells Fargo. I don’t think you have any options unfortuantely.

  • Sheila

    We have been looking to Refinance with HARP. We bought our house for $175,000 and now owe $170000. Our house is now worth somewhere between $140000-$150000. I have been calling around trying to find places to work with us and not having much luck. Quicken Loans told me that since we have PMI that we don’t qualify for this program. The bank our loan is with does not do refinancing or anything they basically collect and process the payment. Do you have any suggestions?


  • Joe


    This is a very helpful website. Thanks for all of the info! Can you give us a clue as to how we can determine if our loan is an LPMI loan? I have reviewed all of my closing documents and I can’t find any mention of any mortgage insurance requirement. Thank you.

  • Sheila,

    Unfortunately, only your current lender can do this at the moment.


    If you didn’t put 20% down at the time you originated your loan, there’s some form of PMI on there, whether you see it or not.

  • Vincent

    Hi Keane,

    My 2nd lender requires a processing fee of $200 to review and approve my request to subordinate existing second mortgage. Is the fee reasonable?

  • Vincent,

    This is your current 2nd lien mortgage company, correct? Yes, it’s typical. Which company is it?

  • Jetersmom

    Hi Keane,
    I am so grateful to come across your web pages. I just wish I read all of this sooner!

    Our mortgage is serviced by Wells Fargo, but owned by Fannie Mae. I called for refinance information in early July and have been working with one of their mortgage consultants. From the start, she told us that we would qualify for a refinance through the HARP program. We live in California and currently owe $389,000. We knew our house would not appraise for this amount.

    First of all, she told us that we could only get this mortgage through Wells Fargo. I spoke to another mortgage broker (can’t remember what company) and they said this was correct. So when I read that you said this is NOT correct, I was very surprised and very upset.

    She has completed a number of good faith estimates (for one reason or another) and we were pretty happy with a 30 year fixed mortgage at 4.85% with 0 points. Our current mortgage rate is 5 7/8%. So we went ahead with the appraisal. The appraisal came in at $335,000. She wrote us an email stating that they were surprised how low the appraisal came in and she had to redo the figures accordingly. We were thinking “Huh?” We thought the appraisal came in higher than we expected. So the new good faith estimate arrived today and now it says 4.85%, but with 1 point. I emailed her and she says this is because the loan was for 118% of the value. Well, wouldn’t it have been nice to know from the beginning that the terms of the refinance would be based on this?

    Can you be so gracious as to offer us your advice?
    Thank you in advance!

  • Jetersmom,

    There are some versions of HARP that the current servicer can do only. They have a version that doens’t reverify income, which only Wells can do. As for the value, any Fannie Mae lender CAN do it but most won’t go to 118%. Only one of my investors can.

    I think the real problem with your scenario is that you were not well prepared. Before I order appraisals for my clients, I share all of the best and worst case scenarios related to value including price adjustments for higher Loan-to-value scenarios. She should’ve done the same for you before committing you to the cost of the appraisal.

    I think your pricing is fine and fair for this market, but it would’ve been nice for YOU to know this may have happened before the appraisal was ordered. That’s the real error here. If you really want a 0 point loan, see if you can get a loan at a slightly higher rate, around 5.125-5.25%.

    Good luck!

  • Oleg


    Any updates on short refi? Do you know lenders/servicers that started to do it? Or it is just as good as HAMP and HARP (sounds good in theory but awful in practice)…

  • Jetersmom

    This is a follow-up to my earlier comment. I spoke to the manager at Wells Fargo and he agreed that I should have been told all the scenarios prior to committing to the refinance. He and I have reached an amicable agreement. Sometimes these things do end up with a happy ending!

  • Frank

    Hi Keane – thanks for all of this great info.

    Here’s the scoop:

    1st – 283K balance – Chase – with MI – 5.875% 30 yr fixed
    2nd – 34K balance on a HELOC, 45K limit – TD Bank (formerly CommerceBank) – 5.25% variable

    I want to refinance the first mortgage. I believe the house will appraise for 340K-350K. Chase, the current servicer, will refinance this through HARP, 4.625% 30 yr, 0 points. (You noted earlier that Chase did not do self-serviced MI loans – perhaps they’ve changed their tune?) The savings will be substantial.

    I’m looking for your experience with HELOCs in this situation. TD will subordinate, but what will they do to the line? Assuming a 340K appraisal, a 90% CLTV equals 306K (TD goes up to 89.99% CLTV on new HELOCs). In your experience, does the second lien-holder just freeze the line, or will they require us to pay it down to a 90% CLTV ratio?



  • Frank,

    I can’t tell you how TD will handle it but most banks will do it.

    As for Chase, the problem we’ve seen isn’t whether Chase initially says they’ll do the loan, but after you already apply. I’ve heard many people say it’s not a problem but I haven’t had any of those people I’ve talked to actually close.

  • Frank

    Ugh. Thanks Keane for the quick response.

  • Paul


    Do you know if Suntrust is doing this program? And if so, what is the best way to approach them. We currently have our 1st mortgage with Suntrust at about $253,000, a sencond at $31000, and our pool at $38000. The VA has just appraised our home at $274000 (we are protesting that value due to problems with the appraiser). We have good credit and have never been late on anything. Will this hurt us? We should fall in the 105%. Any help would be greatly appreaciated. Thank you very much.


  • Evan

    How do we get the short refi ball rolling? We’ve contacted our primary lender, GMAC, who told us that they are just servicing our mortgage and that Fannie Mae holds our mortgage. Furthermore, they indicated Fannie Mae is not paticipating in the “short refi” program and that until they do there is nothing GMAC can do for us. Can we start the process with another lender? What lenders? Does what GMAC told us make sense?

  • Paul,

    VA caps your loan-to-value at 100%, so you’ll have to do a conventional HARP loan. Use the Fannie Mae and Freddie Mac loan lookup tools on this blog to see if loan is Fannie Mae or Freddie Mac owned. If it is, you can probably refinance.

  • Evan,

    Does it need to be a short refinance? Since it’s Fannie Mae backed, you can do a HARP loan. It won’t reduce your balance but you can explore changing the rate and term.

  • Wren


    We have PMI attached to our current home loan which is causing issues when trying to refi. I’m wondering if we have to have 20% of the original purchase price or 20% of the current market value in order for the PMI to be removed. We purchased for $324,500 and we owe $274,500….if we pay down our mortgage to $259,600 will the PMI drop off or do we have to pay down to 20% of the current appraisal?

    Thanks again,

  • Wren,

    Even though it takes 20% equity to avoid needing PMI, you need 22% to get it cancelled.

    Whether or not they use the current appraised value or purchase price is up to the specific PMI company. You’ll have to find out who your PMI company is that your lender used and see what their guidelines are. Your servicer should know.

  • Nancy

    Hi Keane,
    I am in the process of streamlining my 1st mtg with Bank X, My home value is approx. 300k (has gone up)I owe 93k on the 1st,30k on the 2nd(yes,X will sub the 2nd) self-employed husband(same line 15yrs+ work) gross is over 100k, we have 800+ credit scores,no lates,no other debt, plus rental income (no liens)The only difference is I am now a homemaker, not employed. Today,the loan processor tells me they need the prior 2 yrs tax returns since they are processing us thru the HARP program(X never disclosed HARP) I feel that Bank X may be trying to “cash in” on the government bonus they will make if we are submitted under the HARP program. Any thoughts? Thanks much! Nancy

  • Nancy,

    With that much equity on both loans, it’s not necessary. I don’t know why they would do a HARP loan but I do know that 2 years of tax transcripts are usually required, which the lender usually orders themselves. See my latest post as to why. Other than that, I don’t know why.

  • Nancy

    Thanks Keane for your prompt reply! I have called the OCC as well as the HUD helpline. Don’t get me wrong..I would love to shave off $300.00 from my mortgage payment, but will not do so at the taxpayer’s expense!! I feel that our loan is being bundled perhaps to 1)make the portfolio look better to the invester and 2)from what I understand the bank will receive government aka taxpayer bonus funds (up to 5K) as an incentive for processing the loan as a HARP (assuming we continue to make on time payments for the 3 year+ period). You see Keane,I have been a licensed Real Estate Broker for 20+ years (actually just took 4+ hrs continuing education on foreclosures) and I really feel that Bank X is potentially taking advantage of these government help programs to benefit themselves. I would rather forgo getting a refi than to take away from someone else in a dire situation. Thank you Keane for having such an informative website! I wish I could have referred my customers to a lender like you when I was more active in the business! Sincerely,Nancy

  • Nancy,

    Thanks! Yes, our business has become more like medicine or law. Your loan officer needs to know guidelines like a lawyer knows law.

    Did you ask them why? I’m curious to hear their answer.

  • Whether you had a successful HARP loan refinance or not, please help all the homeowners who want a HARP loan and have PMI. I started a petition here:


    This is the last major hurdle on HARP.

  • Nancy

    Hi Keane,
    Ref. Oct. 7th; Yes,I did call and speak to a loan officer I was told that I would not be able to refinance with a no cost streamline as I have in the past as it was not available. The only way for me to refinance would be to do a HARP no cost refi. This has been going on since late August. Now, the lender needs to do an “employment” verification on me (since I am still considered self-employed) by speaking with my tax acct. to verify that the acct. has done my taxes as a self-employed person for at least the last two years (he has for at least 20 years). I sent the lender the last 2 yrs tax returns..ummmm, hmmm,prepared and signed by my acct…yes, showing me as self-employed!! Here is their process, send file to underwriting, file kicks out for needed info, send back to underwriting file kicks out for more info, repeat 3 more times…I asked the loan processor many times what else might you need? ” Oh,I don’t know yet (she is handling over 200 files….ALONE)!!! Now I am told they may not meet closing by the end of this month,my “lock”..(told originally that I was guaranteed this rate no matter what) was only for 60 days..hmmmm I should have known better and asked for a guarantee in writing! I did ask initially if there was a float down lock..told no. The hoops one has to jump thru..just so the bank get the HARP money when really, they would have/should have/could have done a streamline for me anyways! I also read your petition about the PMI. I am sure people are asking..when is this going to end? I think bring on the 40 year mortgage. They have been used for quite some time in some foreign countries as well as here I understand. Thats all for now Keane. Oh one more thing is that the loan officer (these are 1-800 people) told me that their bank was going to be hiring 10,000 additional processors. Wow, I thought the HARP incentive ended June, 2012?
    Take care,

  • Melanie

    Do you know if PNC Bank allows loan subordinations? We have a HELOC that is currently at 3% that we do not want to lose, but we would like to take advantage of the lower 1st mortage rates with the HARP program. Also, our area does not have recent comps for the price range of our home. What are the requirements of determining house value under the HARP program? We do not have PMI; however, with the balance on our 1st + our HELOC we are probably now around 100%. I am very hesitant to contact PNC because I don’t want to mess up our current HELOC. We are good borrowers, with excellent credit that pay on time. Thanks.

  • Melanie,

    I’ve heard that they’ll do the subordination as long as your new loan is within $5k of your old loan amount you’re refinancing. Let us know how your refinance goes.


  • Karen

    Your website has been a great resource of information regarding the HARP program. I have been for over a year now trying to refinance under this program. I qualify, however, Bank of America says they cannot refinance if you have PMI and 125% home loan to value ratio they will only refi if there’s PMI on 105% home loan to value ratio. When I inquired as to why this was when the HARP program clearly allows for it I was told the program allows it but cannot control the decision of the Private Mortgage Companies. What also is frustrating is when I go to Zillow.com my home loan to value ratio is 105% but BOA uses Fannie Mae’s estimate with puts me at 125%. I know I can pay for an appraisal but I don’t have an extra $400. I also live in a condo in a newer community and no one has had any luck selling their condo and there is no other condo in the area that come close to being similar so hard to even try and come up with a guess if the appraisal would be worth it or not. Any suggestions or avenues I’m missing? I was thinking of calling the Hope helpling listed on the HARP website but if BOA is right and the PMI co. can come up with their own rules then sounds like I’m just out of luck.


  • Karen,

    I’m surprised you were even offered 105% with PMI. I haven’t heard one B of A client get a PMI HARP loan done EVER. Rumors, but never a confirmed closing.

    Yes, the PMI company and lender need to be on the same page. Both need to approve it. I wouldn’t bother calling the HOPE line unless it’s to make a formal complaint about this problem. Did you see my recent blog post? I started a petition specifically on this topic.

  • Wei

    Yes I can confirm what Keane said. I spoke to BOA 10 days ago and was told that for loans with a PMI (be it explicit or built into the interest rate) the only refi option would be a “traditional” one. Regarding the HOPE line I agree with Keane as well, it’s a waste of time unless you want to file a formal complaint — but with the way things are going these days, filing a complaint may prove to be a waste of time as well.

  • Jason

    I refinanced my 1st mortg. 300k via HARP in June 2009 through SunTrust. Now, I would like to take advantage of the low interest rates and refi the 300k to a 15yr fixed. I still have a 2nd at 54K. LTV is 120%. Local mortgage brokers are telling me I can’t due to restrictions about not refinancing previous HARP refi’s. Has anyone heard of this? Seems odd…

  • Vicki

    I was just declined for a HARP loan by Wells Fargo because they are unable to use my monthly IRA as income. (I’m under 59 1/2 but qualify under Rule 72t.) Have you heard of this?

  • Jason,

    Yes, there’s a guideline that says your loan must be securitized by Fannie Mae or Freddie Mac by a certain date, meaning the loan they’re paying off on HARP was bought by Fannie/Freddie before a certain time. Obviously, if you refinanced on HARP recently, your loan could not have been bought by Fannie/Freddie before that date. That is the restriction. It’s not crystal clear, but this is correct.

  • Vicki,

    Long term investments is useable income, but it depends on how it shows on your tax returns. Did they even verify your income? HARP with the existing servicer often doesn’t require documentation but they want to make sure you still earn a living. If you no longer work, the loan officer may say you’re not qualified but if the tax returns and documents show you make enough, you can verify your income and still refinance.

  • Vicki

    Spoke to a manager today at Wells Fargo. They finally said they have a policy where they will not use income from an IRA unless I am 59 1/2, regardless of 72t. (I currently qualify under 72t as I am taking substantially equal payments). If I had been 59 1/2 there would have been no problem. They already had the tax documents and proof of income. At this point I’m going to contact a mortgage broker to see if they can help me find a re-finance without the age issue on the income.

  • Cyndee


    I am really in a pickle now. My first loan has a balance of about $188 and my 2nd is 22K, zillow says my house is only worth $188, last month it was $195. I had not been able to pay my property taxes last year and taxes just became due again so my 1st lender paid both taxes and is now raising my payment $700. I am now paying on my 1st $1900 at 6.5 and my 2nd at 8.99, I have contacted my lender 1 several times and they will not do anything. I have so so credit as I had an investment go bad about 2 years ago so of course that ruined my credit, but it is steadily coming back. What can I do, I know I can somehow qualify under FHA, but where can I find a lender that will actually go to what the HARP and FHA guidelines allow?

  • Tim

    Hi Keane,

    Great site, very informative. I am trying to obtain a HARP loan with PMI through my current lender, Wells Fargo, and they are not allowing it. First they told me that it was because of my property type, a co-operative apartment in NY. When I found out that Co-ops were indeed covered under the program, they then told me that it is because of the Mortgage Insurance provider that I have, RCMI (I cannot get ANYONE at Wells who even knows what that stands for or their contact information) which is not allowing the refinance. I now have my congresswoman involved, and even she is getting the run around from Wells. Wells told her that it was Freddie Mac’s policy, and when her office followed up with Freddie Mac, Freddie stated that it was not their policy, Wells was wrong. These banks are incredible. Do they hope that people will just go away? They are all to eager to take our money when they need it, and to keep taking it when we need it. Do you have any ideas?



  • CM Wells


    We’re in the process of refinancing under the HARP program. The new 1st mtg will be $136,000 with a subordinated $32,000 on the 2nd. The appraisal just came in at $179,000 so we will have a combined loan to value of 94%.

    We were told that lenders will charge an additional 1.5% at closing on any HARP loan with a combined loan to value of over 90%. This is the first we’d heard of that. Can you confirm this or are lenders allowed to make their own guidelines on costs? Thanks for any clarification on this.


  • Chrissy,

    This is not true. There may be an adjustment for your loan-to-value WITH your credit score but benchmark HARP loans do not have a price adjustment at 95%.

    In fact, you’re under 80% on your first and 95% on your second, which is low enough that you don’t even have to do a HARP loan. Remember that HARP is basically an expanded version of regular conventional/conforming guidelines. Many consumers apply for HARP loans worried about their home value and find out that their value is good enough to do a regular conventional loan. Your situation fits this scenario. Price both out and see which one is better.

  • CM Wells


    Thanks so much for your quick response. We will certainly do what you suggested and thank you for your input. This is a great blog, very helpful.


  • Chrissy,

    No problem. Good luck and let us know how it turns out.

  • Farhad

    Hi Keane,

    My loan is a 100% Fannie Mae loan with PMI. Am I eligible for FHA refinance option?

    My mortgage has passed from chase to IBM and now is serviced by IBM LBPS. As you know they are not a lender thus they will not work with me I presume. Should I work with Fannie Mae directly in this case? Can I negotiate with MI company and do HARP?


  • Marie Swann

    Hi Keane,
    thank you I learned alot from your website-
    have you seen any successful 2nd mortgage subordination (with the HARP program )allowed with CCO mortgage ? our loan just got purchased by them. value is appx $430,000. 1st mortg is $318,000, 2nd mortgage is 127,000. so the total loan to value could be over 100%……
    also , what states can you do loans in ?

  • Marie,

    I haven’t worked with CCO, but if you don’t add too much to your current balance, most lenders will approve them. It’s been months since I’ve had a company completely deny a subordination request.

    I’m licensed in WA state and my company is licensed in WA, OR, CA, AZ, ID and NM. Even if you’re in a state we don’t lend in, I keep a network of lenders who can help in other states. I’d be happy to send a referral if you’re in another state.

  • Marie Swann

    wow quick response !
    – sorry one item I forgot to include – we own more than 4 financed properties (7, including primary) – have heard that could be a problem with HARP ? the one I am mentioning is a primary residence though

  • Marie,

    Yes, working late night. For a primary, you’re fine. Freddie Mac won’t allow you to finance over 4 unless it’s your primary. Fannie Mae doesn’t have a property limit if you’re refinancing a Fannie Mae loan on HARP. I would check to see if any of your rentals are backed by Fannie Mae. You should read my post on HARP loans for rentals.


  • Amanda Frasier

    We just discovered last week our loan has LPMI, but we were not informed of this insurance during the application process. We never signed an LMPI Notice (which Ive since found samples of online) We were not explained the pros/cons of LMPI vs. PMI. References that our loan includes LPMI of any kind are not listed on any of our mortgage documents, closing paperwork etc. We were clearly told by the lender we could pay a one time upfront “Loan Discount” to avoid PMI, so we did, and this is exactly what it is listed as on our closing statements, line 802. So my question is how many people are out there who have LPMI on their loans that did not agree or sign for LMPI. Not the people that knowingly signed or accepted it, thats very different.

  • Amanda,

    The truth, any Fannie Mae or Freddie Mac loan that has less than 20% has PMI, whether the borrower sees it or not. So many lenders do not disclose this.

    How many are there? Quite a few. It’s honestly the BIGGEST problem left related to HARP. So much that I started a petition on it, which you can find on my most recent post:

    It’s the only thing I could think of that may help. They need to make it easier for ANY lender to refinance PMI and LPMI loans. The biggest joke is that they allow current lenders to do this, but not all servicing lenders originate new loans! It’s crazy.

  • kimarie downing

    Hi we have a home that we owe 410,000 on and it wont appraise at that. I was told i had to go through the same bank for the harp program so I tried and it did not appraise high enough. our credit scores etc are excellent. we are at 6.7 and going to a variable in 2011. currently we are an interest only loan. we want to refinance to a 15 year loan. can you help us in any way. kimarie

  • Kimarie,

    What did your bank say when you went to them? What do you think it will appraise for? Who is your loan with?

  • Sue Bidwell

    Hello Keane,

    Our bank/mortgage company, Wells Fargo approached us and offered us the HARP loan refinance to a 30 year fixed from loan that was fixed for 10 years, adjusting in 2015. I asked if the refinancing under HARP would still allow us to deduct the loan interest on our tax returns. We were told we could still deduct the interest on the HARP loan. Is this true? (I hear mortgage interest deductions may be on the chopping block so it may not matter in the future.)
    I have been searching the web for any documentation on the details of the HARP program that include such information but have had no luck.
    Thank you in advance for any help on this you can give me. SueB

  • Sue,

    For any tax advice, you’ll always want to defer to your CPA or professional tax preparer.

    HARP doesn’t have any special distinction for taxes than any other mortgages, so if it’s tax deductible now, it willl remain so.

    They are voting on removing deductions exceeding a certain amount.

  • Scott


    Hi, My wife and I are both school teachers in Ohio. About a year and 1/2 ago we went through a successful modification with both our 1st & 2nd mortgages. At the time our first was with Chase and our second with GMAC. Since then our first has been moved to LBPS which I believe is a loan servicing company. We are now in the process of getting a short refinance done with Affinity. Our 1st with (LBPS) 125,000 – 2nd still with GMAC 31,000 Total = 156,000. We believe the current value of our home is somewhere between 100,000 and 115,000. We are and have been current on our mortgage payments since the first modifications. We both are still currently employed but have a questionable credit history. Credit score somewhere around 620-650 range. I think we would qualify according to the new short refinance guidelines from the government program. Our mortgage is owned by Fannie Mae. Affinity say they charge around 2k to complete the whole process. I guess my question is if you know what type of reputation Affinity has? Do you have any experience with (LBPS)? From what I have read on the internet not many people have had success working with this company. How long does this process take? If it does go through would we have to pay taxes on the write of amount? I know that is a lot of information to throw at you, but my wife and I would apreciate any info or advice you could give us.

    Thank you,
    Scott & Angie

  • Scott and Angie,

    I would like to hear more successful stories of short refinances, but I haven’t heard of any experiences with LBPS on short refinances or Affinity. The idea is good, but it hasn’t been as well accepted by the existing lenders or new origination companies as I had hoped. As long as Affinity doesn’t want too much money PRIOR to the services being done, I think you’re okay. Give it a shot and let us know how it goes. I gather the info I pass to consumers from the experiences shared to me by consumers and other professionals in the industry.

  • Kate


    Best website I have found for HARP information. Thank you.

    We have a loan through Chase. Called to ask about refinancing. Was asked a number of questions and told we were eligible for the HARP program, and was assigned someone else to work with. Went through the process with that person (so we thought) paying $400 for an appraisal, credit scores checked, provided financial information, etc. Then got a letter saying denied because of property value… appraisal came back almost exactly 100% of what we owe. Called the guy we were assigned to (left 2 messages and 2 emails before he wrote me back) and said I was confused b/c the value seemed acceptable for a HARP. He said we were never doing a HARP b/c we have lender paid PMI. Why were we not told about the lender paid problem before? We never would have tried to do a traditional refi – we are not foolish enough to think we have 20% equity in our home only purchased 2 years ago with 10% down. I have called him again, and left 2 messages for his supervisor. It is fine if we can not qualify for the loan due to the lender paid MI (although I think that is a terrible rule) but I think being charged for the appraisal was inappropriate and misleading. I think this guy took advantage of us to get commission for processing an application. Do you have any suggestions? Am I best just to drop it or try to get my $400 back?

    Thanks for your help and great site.

  • Frank Grunseich

    Hi Keane, just wanted to follow up with you. This might be old news by now, but I wanted to confirm for you that I WAS able to complete a PMI HARP refinance with Chase (borrower paid, not lender paid). My wife and I closed on it yesterday. Chase was the existing servicer and they actually did an excellent job (my loan coordinator was great).

    The situation was further complicated since we have a HELOC with TD Bank. TD eventually subordinated but it took them forever to review the docs, including needing documents to be faxed three times before they actually ‘received’ them. I actually had to extend the lock by 30 days (cost me 3/8 of a point) but I had little leverage in the situation. From start to finish, the whole process was about 75 days. Without the HELOC, it probably would have been 30-45 at most.

    Anyway, just wanted to touch base and update you. Looking forward to some serious savings!

  • Kate,

    I’m sorry to hear about your story. Yes, lender paid PMI is still an issue with Chase.

    Look at your disclosures and look for the lender’s “estimated” value found on the 3rd page of your 1003 application. This is where you enter your asset values and Real Estate Owned properties. What value did he put there?

    Unfortunately, there may not be a ton you can do but if you complain enough, maybe they won’t charge you. Whenever I talk to a client about refinancing, I always try to prepare for the worst case scenario to be safe so we all know the risks we’re taking.

  • Frank,

    I’m glad you updated. I have an experienced loan officer at Chase that came well recommended that told me they can do it, but confirmation of closed transactions is very helpful.

    I’m glad you got your loan done! Even though it’s not perfect, this may be the most successful “Home Affordable” plan utilized.

  • Kate

    Hi Keane,

    Thanks for the response. On form 1003 he entered $365,000 for the estimated value. That was not the estimated value we were given over the phone though – we were told $314,507. (We owe about $314K.) This is why we were discussing the HARP. He sent us form 1003 after we paid the $400 “application” fee. We never thought our home would be valued at $365 and would not have tried to do a refinance where the appraisal needed to come back that high. I like to think the best about people and hope that there was just a huge miscommunication between the first person we talked to and him once he was assigned to us. But I can’t help feeling like he new full well what he was doing and took advantage of us… instead of just telling us we didn’t qualify for HARP he went ahead and did a traditional refi app…very disheartening. I have called his supervisor 3 times with no response. Guess it is time to give up…

    Thanks again for your help. People like you make up for the ones like him!

  • Kate,

    You can always keep elevating it. The good thing about big banks is there’s always ANOTHER boss you can complain to. Pretty soon, you have a long list of people who show they don’t care, which makes it look worse. It just depends on how important this is to you.

  • Robert

    My wife and i were recently married (august ’10) and now live in her house which she purchased on her own in 2006. We are trying to refinance the house through Harp program at CHase, the existing servicer. We were pre-qualified for everything and they offered us a 15/20/30 year fixed rate.
    We elected the 15-year fixed rate, as it is affordable given our combined incomes, and that rate cut our closing costs by an additional $3500 based on points charged for the rate. Chase then came back a month after locking the rate (yesterday) and said that we did not qualify for the 15 year rate b/c they are only looking at her income (82,000/year) and not my income as well (100,000). We are desperately trying to pay down the principal as we owe about $75,000 more than the house is worth. I read on the Freddie Mac website that under ‘Same Servicer’ guidelines, an existing borrower is not allowed to add other borrowers onto the Harp refi, and can only remove borrowers. I also read that under an ‘Open Access’ product, another borrower can be added.

    Do you have any advice for us? I would like to know:
    1)Can a ‘Same Servicer’ refi also provide an ‘Open Access’ product to a Harp refi? We need to figure out a way to get this deal done with a 15 year amortization. Interest savings alone are $1500 in the first year and escalating….

    2)What are some other banks that are doing open access harp refi’s? Our credit scores are 790 and 800. We owe nothing other than our house, we have 180,000 in gross income. Her rate is in the 6% range now on an arm and we want to lower the rate so that we can apply more to principal and move towards one income and kids sometime down the road!


  • Robert,

    They used to not allow new borrowers to be added but as you mentioned, this can be done on an Open-Access refinance. Chase SHOULD be able to do this but they may elect not to.

    Just about every Freddie Mac lender who participates in this program in your area should be able to help, but I would recommend asking Chase to look closer. They’ll need to run your file through Freddie Mac’s underwriting engine (Loan Prospector) and guideline requirements may be more. However, your credit and income do not appear to be a problem, so providing extra documentation shouldn’t be factor.

  • Robert

    Thanks for the info, Keane! We are on the right track with Chase, I believe. I’ll keep you posted.

    Kind Regards,

  • Kate


    Persistence pays… left four messages for the boss. Today I called the general line and asked who else I could speak to. Luck would have it I was put right through to him. He claims he never got my messages… long story short I am receiving a refund check. I told him I hoped they educated their people more so that others would not be told they could do a HARP refinance and pay the application fee, when in fact they can not.

    Thanks again for a wonderful site.

  • Kate,

    Yes, persistence does pay! I’m so glad to hear it worked out.

  • Richard,

    I’m sorry to hear you’ve lost that much equity. If your loan is eligible for HARP, you’re limited to 125% of the appraised value. You would still be $40-100k underwater using the values you gave. If you can cover the difference in cash, this may be an option. WIth the amount you’re underwater, I would also consider locating a lender who could try the FHA principal reduction refinance. I haven’t heard enough confirmed closings to state this is a viable option but with your equity position, I would seek this option out.

  • Kinga

    Hi Keane,
    Just started looking for a Refi. Brief summary:
    house value on Zillow is about 180K. We still owe 263K. No PMI,no second mortgage, Good credit score, no late payments, no other debt. Mortgage owed by Fannie Mae.
    I spoke with BoA (current lender)and was told that we do not qualify for HARP refi because our first loan was a no-doc loan. Is this a valid point? I did not see that on the eligibility list.
    Do we have any other options?
    Thanks in advance for your help.

  • Kinga,

    It’s possible that another Fannie lender can do it. The loan they’ll first try to do for you is called a Fannie Mae “Refi Plus”, which is a version of HARP that only the existing lender can offer. A Fannie Mae lender who is not servicing your loan MAY be able to do a HARP loan for you through another program called “DU Refi Plus”. A Fannie Mae lender will run your scenario through a program issued by Fannie Mae called DU (stands for Desktop Underwriter). If DU says you’re eligible, you can get a loan. Your max will either be 105-125% of the appraised value, so you may be short.

  • Renee

    Hi Keane:
    I received a FedEx letter from Chase regarding the Harp Program. The offer is that there are no fees associated with the refi. The loan would take my rate from 6.375 to 5.25. I have good credit with no late pays. Should I opt for a FHA refi? I tried an FHA refi some years ago and was told I was could not refi a conventional loan to an FHA. Have you heard of this? Has it changed? Is it possible to get a better Harp rate with a better lender? Chase holds the loan now.

  • Renee,

    Few things. First, your existing servicer does have options to do a version of HARP where it’s really a change to the existing note without recording a deed of trust. The loan must have been a Chase loan from the beginning.

    However, 5.25% on today’s pricing is not a good offer. You can get that or better from any lender on loans at $250,000 or more. Remember that HARP pricing is based on the same bonds that regular conventional loans are priced from. Today was a good day for rates, lowering down to the mid 4’s. See if you can get something better.

  • Robert

    Just wanted to update you from my email on Dec 11th. After many back and forth emails with hard headed people in the underwriting department at Chase, I was able to convince the this mortgage department that Chase could indeed add me as a borrower on the refinance of our home. This has been a long and drawn out process, and has taken the bank 62 days since the original loan approval to get the ‘commitment letter’ to us that shows a 15-year amortization like we requested and were told we originally qualified for (versus the 30-year with increased fees that they countered with after declining us for the 15). Our 60-day rate lock expired on 1-13-11, but the bank extended it for an additional 30 days to allow us time to close. They are trying to get the documents drawn up and we expect to close by the end of next week.

    This has obviously been a stressful process for my wife and I, but I am thankful to have run accross your blog. Its great to have this type of resource and I would advise others to question the banks they are dealing with, as often times individuals are not as knowledgable about their employers own credit guidelines as they are supposed to be. After dealing with a long line of unknowledgable and uninterested loan processors/mortgage specialists, I found myself dealing with the ‘Underwriting Manager’ of one of Chase’s regional loan hubs. I had to explain to him via email, the details of his employers credit guidelines; and i dont even work there! He originally told me i was incorrecct and to stick it; but after finding ANOTHER more caring and interested Mortgage Specialist thru the 1-800 number, i had the ammo i needed to get these people in line. The knowledgable mortgage specialist sent the credit guidelines tot he ‘Underwriting Manager’ and, needless to say, the underwriting manager came around and got things taken care of.

    I truly appreciate your guidance and support. Hopefully this post will inspire others to question those they are dealing with. The system is flawed. My success goes to show that it pays to be hard-headed. Your guidance and suggestions have been very much appreciated.

    Kind Regards,

  • Robert,

    Wow, it blows me away that the effort needed to get your loan through reached this level. I imagined clients using this info to push the lenders once to get it through. It sounds like you had to climb a ladder and push several times to get it through. Amazing.

    I’m really happy to hear it worked out for you. Thank you for sharing your experience with others. I’m sure this will help others in their goals to get their HARP refinance done before the June 2011 deadline.

  • Viktor

    Hello Keane,

    Great info Thanks so much!!!

    I live in a condo in Maryland. The condo’s market value approximately at 168K.

    Got 2 mortgages. First mortgage:

    5-yr ARM (5.125%) originated in 2005 for 200K (based on 1-yr LIBOR 2.25 margin 2% yearly cap).
    This mortgage adjusted down in June 2010 from 5.125% to 3.125%
    Owe 178K (payment $974 with $100 monthly escrow county tax).

    2. Second mortgage – fixed 7% owe $7800 (monthly $346 been paying $1500). > was told by BoFa that they will likely have no problem having 2nd mortgage subordinate.

    I know that I qualify for HARP (Fannie Mae is the investor on 1st mortgage).

    Contacted my BOFA mortgage holder refinance loan officer. He said they will be able to approve to loan 176K (105% LTV) quoted 5.375% (no points) 30-yr fixed with $3500 maximum out of pocket at closing.

    It’s possible my property value will decrease somewhat more in 2011. And I know HARP is going to expire in 2011.

    Does it make sense for me to refinance, going from lower to higher rate? Since my 1st mortgage is based on 1-yr LIBOR, which is very low right now, perhaps, should I stay tied for couple-three years and enjoy 3.125%?

    Thank you

  • Viktor,

    It may be hard to swallow a higher payment but I would do the loan. The first question you need to ask is how long do you see yourself keeping the property? I think your equity position REQUIRES ownership longer than 3 years. That index won’t stay low and it can adjust at 2% each year.

  • Liliana

    I have a 80/20 signed on January 2007 with a 5 Yr ARM. The 1st mortgage holder is American Home Mortgege Services, $ 106,000 and the 2nd mortgage is with EMC (Chase) for $ 26,700
    At the beginning of 2010 made calls to my lender and finally was told they can’t help me. I let it go for a while but now I would like to try to refi with another lender. I am eligible(Freddie Mac, current on payment, primary residence)
    The market value of my house is $110K-$106K. Can you tell me where can I find a lender that can help me with this? Somebody told me Aim Loan or Suntrust, can you confirm that with me? Is there a list? Thank you for your help.

  • Lin

    Hello Keane,

    I keep hitting a wall with my Re-fi. My 30-year fixed interest only loan for $200K (with no MIP) is a Freddie Mac loan through First Horizon. Our house is worth exactly what we owe on it. My understanding of the HARP is that there are no closing costs. When I tried to refinance with First Horizon, the closing costs were estimated a little over $7K. Can you explain this?

    I called Wells Fargo and was told the HARP refi has to be done through our original lender, First Horizon, because it is a Freddie Mac loan. Is this accurate?

    Any light you can shed on this would be extremely appreciated!

  • Lin,

    That is absolutely not true. There’s a version of HARP that only the existing lender can offer but it doesn’t always mean it’s easier to get done. Sometimes, it’re more difficult. If you have a non-PMI Freddie Mac loan, any Freddie Mac lender who participates in HARP can do your loan within HARP restrictions. The program you’re looking for is the Freddie Mac “Open-Access” refinance program.

  • Liliana,

    Your loan sounds very do-able but you must insure that EMC will subordinate your 2nd mortage, meaning give you permission to refinance your loan. If they will, which my experience with EMC is positive, you can get it done with any Freddie Mac lender.

  • Lin


    Thanks for your reply. I called Wells Fargo AGAIN and they said they cannot refinance Freddie Mac loans that are through another mortgage lender. I live in Florida. What other lenders do you recommend?

    Thank you!

  • kimarie downing

    I have a freddie mac loan and owe 410,000 and it appraised at 285,000 not meeting the 125% mark. i was told that our bank had to do the loan with the Harp and then I heard that that was not true. I dont feel that we got a fair appraisal as I looked at the comps in the area. our loan is with chase. we were fully approved except for the appraisal and it did not come in high enough. second question is we have 3000 square foot home but they could not count the basement that is liveable because it is not permitted. That made the difference in our appraisal. any suggestions how to get refinanced. we had a 5 year fixed with a variable. we are ok now with rates low but if they go up we will probably lose our home. thanks

  • Kim,

    You can try another Freddie Mac lender if you want. You can also try to dispute the appraised value but if the loan officer isn’t good at disputing value, they’ll often tell you there’s no options or they’ll waste their time trying.

    The key is to have the data to support it’s worth more OUTSIDE of the home. If they didn’t use the basement, is there homes that are similar with finished basements selling for more? If so, those homes can be added to the report to add value. Just an example.

  • Paul

    I have a 1st mortgage with Citi for 168,000 and an Equity Line of Credit with PNC for 235,000. Willow says my home is worth 410,000. Can I refinance with FHA to cover the whole 403,000?

  • Chris

    I have a mortgage with Chase, they called me to say they could refi my loan for a smaller monthly payment and interest rate. I was also told that I would have to pay a application fee up front of 395.00. The interest rate is 5.625 (Current 6.375) and I would only drop my payment by 160 a month. My question is should there be a application fee and is this interest worth taking. I do have a PMI. I think that this might be my only chance to refi since I am 124% underwater on my mortgage.

  • Paul,

    You have to check on HUD’s website for the max FHA loan limit in your area. If you can, you can almost wrap the two together.

  • Chris,

    That rate is kind of high but you’re right, 124% loan-to-value and PMI, it’s the only thing available to you. Nobody else can offer you the refinance. The only thing you can do is float the rate market and hope for rates to drop some.

  • DJ

    Hello Keane, I have a Freddie Mac loan owe $400,050, interest rate 6.125%, $3,171.82 per month, estimate value $328,500-$358,00 from zillow. I do have PMI. I called my lender CitiMortagage & they offered me a HARP 25yr, 5.5%IR, 5.6APR, Application/Appraisal $475 & Title/Close $4500. Title/Close will be rolled into mortgage. New mortgage $3000.00. They will only go 105%LTV & I may need close somewhere between 120% to 125%. It needs to appraise for $386K to work with Citi, if I could find someone who will go higher I might have chance. Can you recommend someone?

  • DJ,

    Unfortunately, your loan must be done with Citi because of the PMI. The PMI company likely has their own LTV restrictions which is why they only will go to 105%.

    It won’t make sense to draw funds from an account to reduce your rate only .625%. See if you do have funds available via 401k or another source. If so, then tell Citi you won’t do the loan unless the rate is at least 1% lower. Paying down the balance to reduce the rate .625% doesn’t make a lot of sense.

  • Allison

    Thank you for this wonderful website. I have been trying to find a HARP loan, but have not yet had much luck. My husband and I both have credit scores above 740. We have 2 homes. Our original home has a 80 20 mortgage, and we have it rented. The home we live in we built 3 years ago and we have a regular fixed 30 year mortgage. We do pay PMI with this mortgage. I am trying to figure out what we can do with one or both loans to make things easier now and in the long run. The problem seems to be that we do manage to pay our mortgage on time on both houses and pay ALL our bills, but that leaves almost nothing extra. Even a 1/2 point interest reduction and a 100 dollar a month less payment would improve our lives drastically. I am not sure where to go from here. I have not had much luck with lenders yet and I am trying to make all my inquiries within the same 30 days and have about 2 weeks left. Any advice would be most helpful. Thank you so much.

  • Allison,

    The rental property is the easier one to refinance believe it or not (if it’s Fannie/Freddie backed). The house you live in must be done through your current servicer if they’re a HARP lender. Who are your loans with?

  • Allison

    Thank you! My home loan was with TB and Whitaker and now I am stuck with Cenlar who says they do not do mortgages. I actually would love to refinance the rental property, but thought it would not be possible…can I go the HARP route with that?

  • Allison,

    if the loan is backed by Fannie Mae or Freddie Mac, yes, it’s possible. I wrote a blog post here on the topic.

  • Bob

    I have a 1st (169K) with freddy mac through wells fargo and a 2nd (49K used) home equity line through wells fargo. Can I do a harp that wraps the two together to one mortgage? My House is worth ~160-197K.

    Thanks in advance

  • Bob,

    Unfortunately not. Only the 1st mortgage is eligible for refinancing.

  • Allison


    Thanks again for all this information. I wish I was your client, as I am hitting road blocks everywhere. This is so frustrating. What the banks keep saying seems so different from what I am reading.

  • Aimee

    Thank you for this website. Do you know how long the bank has to answer when Fannie Mae sends to them to place homeowner into a program such as HARP? We are going on 60 days this week with Wells Fargo. We feel like they are dragging their feet to slow our process of a refi. Thanks!

  • Allison,

    Sorry that it hasn’t been crystal clear. This program is fairly new and the guidelines have changed a few times. People either stay on top of the guideline changes or they don’t. Good luck!

  • Aimee,

    It all depends on the lender you’re working with and what roadblocks are in the way of your refinance. If you have a 2nd mortgage, the process is always longer. I’ve done HARP loans in 2 weeks (appraisal waiver) and other have taken months due to a subordination request on a 2nd mortgage.

  • Mara


    Thanks for your postings. It is very informative and helpfull. Below is my scenario and it would be great if you could provide some clarification.

    Current Home value: 210k
    Mortgage: With Fannie Mac, 260k, 30yr fixed, 6.125%.
    Second Mortgage: None. (as I put 20% down and got only 80% loan)
    PMI: None
    DTI: 27%
    Primary home: Yes. But will be moving out in 6 month for personal reasons and need to rent this out.

    Hardship: None to document. But, want to reduce the monthly payment so the rent can cover the monthly payment when I do that after 6 months. I do not want to pay more than what I will get in rent for this house.

    Current on Mortgage: No. When I first I called my lender to reduce my payment, they said since I am current on my payment they can’t do anything for it. So delayed the past one month payment which is already shown in my credit report. Then the lender asked me to send the workable soultion application with the supporting documents.

    Based on the information in your site and makinghomeaffordable.gov, it looks I may not qualify for both HARP Refinance and HARM Modification? Or Am I missing anything in it? Is there any other alternatives in reducing the monthly payment so I can prevent foreclosure?

  • Mara,

    this is what happens when you talk to someone at your lender who doesn’t know the programs. Prior to being late, you qualified for a HARP refinance. Now that you’re behind, you no longer do. You can try for a HAMP modification but there’s no guarantee it’ll go through. Are you more than 30 days behind?

  • Mara

    My due date was Descember 15th (for the month of January 01) which I deleayed.

  • Mara,

    I wish there was an easier way of saying this. You probably qualified for a HARP refinance prior to being late. The person you talked to only was referring to a modification program. HARP requires you to have no late payments in the last 12 months.

  • Jon

    Servicer is BAC (was formerly with Countrywide). I am underwater by 20%. Loan has PMI with Genworth. I have a printout from Genworth that says they will re-issue the MI certificate up to 125% LTV. I am being blocked by BAC from doing a HARP refi they are not interested eventhough I can prove that the PMI company is not objecting. Does anyone have any insight as to whether BAC is getting into the 125%LTV w/PMI game?

  • Jon,

    Bank of America isn’t doing these HARP loans.


    It doesn’t matter who the PMI is with.

  • Dennis

    Hi Keane,

    I am in California and have a 6.375% 30yr fixed with Wells Fargo that is not a Fannie Mae or Freddie Mac (called to confirm). We owe $464K and have about 15% equity. I am looking for loan options that don’t include PMI. We have good credit scores and good debt/income ratios but this doesn’t seem to matter. Any suggestions?

  • Dennis,

    All conventional loans will have some sort of PMI if less than 20% equity. However, you can pay it all once as a closing cost, which will remove the PMI from the monthly payment.

    Also, you can do a FHA loan up to 90% on a 15 year term and only pay an upfront MIP of 1%. No monthly mortgage insurance.

    The only other option is a VA loan if you’re a veteran, which also has an upfront fee.

    All of the 3 options I outlined have an upfront fee of some sort but no monthly PMI payment. I hope that helps.

  • EC

    Hoping you can help me understand as I’ve tried Fannie Mae, Making Homes Affordable’s HOPE line, and other sources but no one seems to be able to answer.

    1) who is actually responsible for setting and enforcing the guidelines of HARP?
    2) If you are approved by DU for a HARP loan, does that mean you are approved, or does the lender have discretionary power?

    I am current with my loan, and applying for a DU Refi Plus with my current lender. The loan is owned by Fannie Mae and was purchased by them during the eligible period. I have more than 5% equity, a credit score between 750-800 on all 3 bureaus, my LTV is not more than 31%, but I am self-employed for only a short time.

    My rep ran me through the DU system and it got approved, but then the package was transferred to the underwriting dept who proceeded with a second, manual underwriting analysis and rejected based on the self-employment period.

    Is this right? I would have thought being approved by the DU process would have negated the need for the other?

    It should be noted this makes no sense to me as I am current on my loan at the higher interest rate and higher payment, so the bank is not assured I can pay the lower payment, according to them, but at the same time expects me to continue making the higher payments.

    No one at any organization seems to be able to tell me if what my bank is doing is legal or not based on the program…

  • Aimee

    I have come to the conclusion that the banks aren’t interested in helping people through HARP or Loan Modification or any program. Why should they? They collect insurance money after homeowners foreclose and there is no incentive except to help people foreclose. They caused the housing bubble and are continuing to force people to foreclose. I am so disgusted with these banks and all these “government programs” that the banks are making up rules as they go to make sure people aren’t qualified. And no one is watching what the banks are doing. Fannie Mae is worthless to what I have experienced.

    It is so disheartening. I don’t know how to put it any other way except to say they are crooks.

  • EC,

    Unfortunately, the shared risk the lender takes in closing these loans always allows them the discretion of how much risk they’re willing to take as long as it’s not considered discrimination. If it’s a risk based decision based on income, they may turn you down.

    How long have you been self-employed?

    DU is a guidance for the underwriter but it’s not the end all to underwriting. That I do know. Fannie Mae does not guarantee lenders that they will purchase the loan from them if it passes DU.

  • Aimee,

    I know it seems that way but HARP is not something that lenders are turning down for insurance money. Lenders do profit from these loans just like any other refinane program.

    However, the biggest problem with HARP is the creation of HAMP and the modification departments. The low-level employees at these lenders who receive customer calls do not always send the homeowners to the right department. The fastest way to get a horrible/mis-informed response to your HARP refinance is having your customer service rep send you to the modification department, not a loan officer.

  • Dora,

    You may qualify for HARP, which is a conventional refinance but the value may be a little light. Who is your 1st mortgage loan with?

  • Romana

    My husband and I got a letter via FedEx today from Wells Fargo, our mortgage lender, re: HARP.

    Backstory: We bought in early 2005 and put 30% down on a $220,000 house leaving us with a $154,000 conventional mortgage – 30 years and 5.75%. Needless to say, thanks to the crash and a bazillion foreclosures in our neighborhood, our house is now valued at somewhere between $125,000-133,000 and we owe $140,000.

    We’ve never missed a payment and hadn’t even considered a refi until this letter. The thing that seemed too good to be true was the way they kept saying there are absolutely no costs to us involved with this program.

    If anything, we’d be interested in a 25 year refi. Wells Fargo’s rate for that would be 5%. That’d cost us an extra $30 per month and save us over $37,000 at the end of it all. Better that in our pocket than theirs…but I am still skeptical.

    Am I missing something?

  • Romana,

    There are some versions of HARP that don’t require fees if you’re going through your current lender. It’s not common but it’s possible. Is your loan with Wells Fargo?

  • Romana

    Good morning and thanks for the reply!

    Yes, our mortgage is with Wells Fargo. They’re telling us that the program expires at the end of this month so we are running out of time and HURRY HURRY. But it seems the information online says HARP will end on June 30th. Hm. That seems like a red flag to me.

    My husband has an email (we like things in writing) to the loan officer who sent the FedEx letter asking for some clarification on exactly what this refi would entail.

  • Romana,

    HARP was just extended until 2012


    So no rush on the program, but refinance when you think values are strong enough to support the program and when you think rates are low enough. If you want someone trustworthy at Wells Fargo, email me and I’ll pass along a name of a loan officer.

  • tina

    I have been working with Suntrust for 3 months now attempting to do a HARP loan. I have met all qualifications from the beginning but last week was told at the last minute this loan would not qualify because of a short sale in 2010 my ex-husband and I did with another property. Is this correct? I was under the impression this would not affect a HARP loan in any manner? Am I incorrect.

    Thank You.

  • Tina,

    HARP restricts homeowners from qualifying if there was any mortgage late payments in the last 12 months and general guidelines that have a 2-year short sale seasoning requirement. Unfortunately, you’ll have to wait but the extension of HARP may allow you to qualify before June of 2012.

  • Sahara

    Chase has contacted me for a HARP refi. I thought this program was aimed to aid those who need refis to avoid foreclosure… I have a 27% ltv and have never missed a payment and I’m wondering why Chase is pursuing me… with only 7 yrs left on my mortgage it only helps me if I continue to contribute at the rate of my existing payment.
    Is the govt subsidizing these loans or loan fees in any way? What does Chase get out of the deal?
    thanks for your help.

  • Sahara,

    These loans are sold to Fannie Mae and Freddie Mac just like a regular refinance. The lenders profit from the refinance just like any other refinance. That’s why they’re calling you. The guidelines do allow refinances with little document verification.

    With 7 years left, you’re likely in the best scenario available.

  • Casey

    We are refinancing our first mortgage of $243,000 with CitiMortgage through the HARP program. We qualify, but need our HELOC, 2nd Mortgage (that has not been used, is locked and has only paid every month on-time for over two years now) through our local Credit Union to be subordinated. The Credit Union is telling me that “the CLTV (Combined Loan-To-Value) limits cannot be changed from the original approval and/or be greater than 80%”. The house was recently appraised to be worth $320,000 and we owe a combined total of $263,634.64 with both mortgages which puts us at an 82% CLTV. Do you think the Credit Union will subordinate it? Do you know if banks sometimes look at other factors such as on-time payments with the current loans, loyalty to the bank and such? I saw in your blog that you have seen banks that will subordinate over 100% CLTV! Any ideas for getting the subordination through the CU. I have an appointement to speak with a Manager there this week. We cannot combine the mortgages with the first lender because our debt to income ratio is a too high for them (50%). Any advice would be so appreciated.



  • grace

    we have been called by Chase repeatedly and finally spoke to the loan officer who gave me actual figures. We are in our 8th year of a 30 year fixed loan @ 6%. We could do the HARP refinance/modification saving $230. per month on another 30 year fixed @ 5% …. OR a 15 year fixed @ 4.625% which will cost an additional $127. per month than what we now pay.
    We will retire in the next 10 years and have college costs for the kids, etc. We probably could afford the extra monthly for the 15 year fixed and eventually try to pay some additional on the principal.
    We were not planning on refinancing until Chase called…. (we thought it a scam at first)
    any advice?

  • Melissa

    Hi Keane,

    Both the mortgages on our primary home and rental property are with Bank of America.
    Our first home loan has PMI and is underwater(balance of $260K, valued at $190-210K). Of course BOA won’t touch it with a 10 ft HARP pole, with the PMI built into the interest rate @ 7.5%. My debt to income ratio is over 50% and we are struggling to make ends meet each month.
    What are my options?

    We also tried to refi the rental property with no luck either. We have a first and second loan with a combined ltv of 91% and but said it can’t be over 75% for investment properties. There is no PMI on either loan so what is the problem? We go without other things to pay these loans, but at 6.84 and 7.5%, I feel like we aren’t getting anywhere.

    No payments have been missed on either loan and we have 700+ credit.

    There has to be a way…

  • Casey,

    Subordination departments often have clerks who don’t take into consideration common sense. You don’t even need a HARP loan for your Combined-Loan-to-Value. That’s ridiculous if your credit union denied that subordination.

    Do you have the cash to pay it down to 80% if needed? I would fight that all day long.

  • Grace,

    It’s probably not a scam. Personally, I’d take the 15 year if it’s comfortable for you. There’s no reason to pay on a loan longer than you need to if the payments are affordable.

    People always say, “We can take the longer loan and pay extra” which I’m sure they do, but they NEVER do the same thing on auto loans. Why do it on a mortgage? Only if the shorter term loan is too much. For that much of a difference, I’d take the 15 year loan. Just my two cents.

    What are the fees? If the fees are fair, it sounds like a fine refinance. Just remember you CAN shop this loan. Other Fannie/Freddie lenders can do this too.

  • Melissa,

    First, the debt-to-income calculation for people who have rental properties is calculated differently. You don’t need to have $100 of rental income to cover a $45 mortgage payment (45% ratio). We use 100% of the income on the tax returns to REDUCE the mortgage expense. The DTI is probably fine IF you find a loan officer who knows how to calculate income on a Schedule E.

    If your second mortgage is a Fannie/Freddie loan, you can refinance this on HARP. See this post:

    Unfortunately, the first mortgage is out of luck. However, I would look hard at the rental and find a Fannie/Freddie lender in your state who knows how to do these. If you email the state you’re in, I can find someone for you.

  • Casey

    Hi Keane,
    Thanks so much for your help. No, we do not have the $8000 or so to bring the 82% CLTV down to 80%. I will speak with the CU manager today about it. I would hope that they would take into conseideration the fact that we have not missed or have been late on a payment EVER, that the loan is locked and we cannot even withdraw from it, the payment is coming directly out of our checking account, and we have been loyal customers for many years. I will also point out the fact that we are using a HARP refinancing with CitiMortgage on the 1st loan so that we can afford to keep the house and not lose it, which will not be the best for any of the parties involved.

    Thanks again for all of your information.


  • Casey,

    It does help to tell them it’s a HARP loan sometimes. Good luck!

  • Melissa

    Thanks for your help Keane. I’m in IL.

  • Melissa,

    Do you know if you have a Fannie or Freddie backed loan?

  • Melissa

    Yes, I checked a while back but don’t remember which one. It is an FHA loan backed by one of them.

  • Melissa,

    If you have a FHA loan, it won’t be backed by Fannie or Freddie. However, it should eligible for a FHA streamline refinance if it’s a FHA loan. Any FHA lender can do this. No appraisal is needed.

  • Melissa

    I am told no to the refi now because it is rental property and over 75% cltv. Is this right?

  • Kim

    We were contacted by Chase for the HARP loan, and have signed up for the refi. I have found out that my second loan holder requires a $200 non-refundable application fee to make the determination as to whether they will subordinate or not. My first is at 76% LTV, and with the second it will be 86% LTV. I pay no PMI, and have a Fanny Mae Loan. Credit for both of us is over 810, no missed payments anywhere for anything. There was some discussion that with the HARP loan if you were refinancing less than 5k above the current debt that subordination is, if not automatic, then pretty much a done deal? My second is with Suntrust, and they are holding us up with no guarantee of approval. Is it possible to call the loan a modification and not a refinance, using the current number, etc? Thanks. Kim

  • Melissa,

    You can only refinance a FHA loan to a conventional loan at 75% as a rental. If it was owner-occupied, you could do a FHA-to-FHA refinance. So, yes, your information is unfortunately correct.

  • Kim,

    Suntrust is the worst when it comes to subordinations but the last time I checked, that CLTV should work. If it’s a Freddie Mac loan, you can only increase your first mortgage $5k to include closing costs.

    At those loan-to-values, you actually don’t even need HARP. If you need a contact to help you get this refinance done, please email me and I can forward you a contact.

  • Ken


    I have a 30 year interest only option arm with IndyMac that will adjust in June of 2013. This balance is around $124,000.00. I have a second mortgage with Fifth Third Bank with a balance of around $36,000.00. The house is worth about $160,000.00 but maybe is in need of some upgrades/repairs. I looked at the HAMP guidelines but PITI on first mortgage is at 28% of gross monthly income. I filed Chapter 7 BK and it was discharged 11/2010. It looks as if I would not qualify for any loan other than an FHA loan but not until 11/2012 and HARP ends 06/2012. We want to stay in the home instead of selling. My 2nd is interest only as well with a fixed rate option at around 8.99% What are my options if I want to try and get a better, fixed rate loan?

  • Ken

    Keane, to add to the comment above, I’ve never missed a mortgage payment and reafirmed both of these mortgages. I also have 5 other mortgages on investment properties. I reafirmed all of these as well and never missed a payment on any of them. Thanks in advance.

  • Ken,

    I would contact One West Bank who took over Indymac. The version of HARP that the existing servicer can do has pretty loose credit guidelines. They primarily are looking at your payment history. You’ll need to make sure 53rd Bank will subordinate your second mortgage but I’m sure they will since they participate in HARP.

  • jim


    Just a question to know if I am going down the right path? Current mortgage with Chase. Attempting a 15 year Harp refi on my exsisting 15 year. Home value 149,000, 1st balance is 124,000, 2nd balance is 16,000. credit score of 787. Chase says the 15 year rate is higher 4.875 because of 2nd added to 1st. Saying I can’t get the best rate because of this. Is this a good rate? And I feel the closing cost of 4150 is kind of high for a refi with the same company.
    Should I check elsewhere or would I be better off going with a FHA mortgage

  • Jim,

    I wouldn’t go FHA. FHA 15 years loans have mortgage insurance if above 90% of your home value but more importantly, they no longer allow 2nd mortgages to exceed the home value. This wasn’t always the case but it is now.

    They’re correct that the “combined loan-to-value”, which is due to the 2nd, affects your pricing. I can’t comment on the rate unless I know the amount of fees the lender is charging (not total fees, but just the lender fees) and the area the home is in. If there are lender fees, the rate is a little high.

    Is the 2nd mortgage also with Chase?

  • Eric


    Just found this website, and I’m hoping you can help me make the right decision. I am in Michigan, have a Freddie/Fannie mortgage of $228,000 on a house valued at approx. $190,000 at 6.375% (currently interest only until 2016, will adjust to a 20-year at the same rate). Also have a 2nd mortgage of $12,000 at 7.25% fixed and paying down extra, but not sure if that matters. Talked to my current lender, they said they can do a HARP down to 5.375% for about $5K in closing costs. So I have a couple of questions:
    1. Should I refinance?
    2. Should I shop around to try and get better closing costs?
    3. If I have the money in savings, should I pay off the 2nd mortgage now?
    Anything I’m missing?

  • Eric,

    You won’t see payment savings but the money applied towards principal is helpful. For totalling your fees, be sure you’re not including impound reserves as fees. If the fees truly are $5k, it’s sort of high but considering your estimated value, it’s probably the right move. Ask if having the 2nd paid off will improve your pricing. It will definitely speed up your refinance and I would recommend it.

  • Eric

    So in your article you mention that you can shop your HARP mortgage around, do you know of any lenders who do this? I have been unable to find anything on the web about lenders who are willing to take on HARP loans. The manager at my bank says he’s never heard of such a thing.

    Also, just to confirm, you can’t get any cash out of a HARP refinance, correct?

  • kim

    Hi. we are still trying to refinance a 410,000 loan. we would like to go to a 10 or 15 year loan but our loan to value on our home is not good. is there anything we can do. our loan is a freddie mac. last appraisal showed 285,000 about 5 months ago. its so discouraging to work all your life and now be upside down on a mortgage, qualify for the loan but not have the loan to value to refinance. any help would be appreciated.


  • Eric,

    You cannot cash-out on a HARP loan. Managers at banks are not mortgage specialists. What state are you in? Any qualified Fannie/Freddie lender who participates in HARP can do these loans.

  • Kim,

    Do you know if your loan is backed by Fannie Mae or Freddie Mac? Where is the home? Who has your loan?

    If the appraiser came in at $285k, you would still need to pay the loan down to $328k on HARP since the max loan-to-value is 125%. Hang in there, it won’t stay this way forever.

  • Ken

    Keane, do you think that it will also be possible to look into HARP loans for my 2 rental properties? They are with GMAC Mortgage at 7.25% rates. Like I said before, I was just discharged from Ch. 7 Bankruptcy Nov. 2010; but I’ve never missed a payment on either of these.

  • Ken,

    It’s possible but I can’t say for sure. I know that if it’s a Freddie Mac loan that used to be a primary residence and is now a rental, it’s not eligible. I also know that if the servicer has moved, it’s likely not eligible too.

    Only GMAC can do this for you if it is eligible.

  • Carla

    I talked to our current lender, CitiMortgage, about refinancing our 20 year mortgage through the HARP program. It’s owned by Freddie Mac. They said they refi up to 105%. We owe about $266,000 with a little over 15 years to go, but he wasn’t sure our property would appraise at the necessary approx $257,000. I thought part of the HARP program was that the lender forgave 10% of the loan, which he never mentioned. Is that correct? He said they participated, but sounded like he was talking about a regular refi. We’ve never been late on payments (on anything), but our credit scores are in the 660-670 range due to a high debt to income ratio (college expenses for 2 kids combined with a drastic cut in available credit thanks to the credit card companies). Do you have any suggestions as to our best course of action?
    A second question – we also have a loan on raw land, balance about $144,000 at 8.5%, but we do get a Patronage Dividend each year to sort of rebate some of the interest. My thought was to take out a new loan on our home for a longer term, 20 or 30 years at a lower rate, then pay more toward the land, which is at a higher rate and not tax deductible as a mortgage payment. Once that’s paid off, we could then apply the amount we were paying toward the house. Does this sound like a good idea?

  • Carla,

    HARP allows up to 125% of the appraised value but most lenders will only go to 105%. There’s no principal forgiveness on HARP. It really is a regular refinance but allows a refinance with no equity and sometimes less documentation to qualify.

    If all of the savings on a 30 year loan were used to pay down the other loan, I would probably do exactly what you suggested. The key is to make sure your disciplined to make the extra payment on the land loan every month. If you can do it, it makes sense to pay that loan first then move all the payment savings to the other property.

  • Mark

    My credit score is 560. My loan is a 30 yr fixed at 5.875% with Citi. It is owned by Freddie Mac. No late payments on the loan in the last 12 months. LTV is around 95% with no MI. Anything you can do?

  • Mark,

    Citi may have a version of HARP that will not verify credit. You should call and ask if they can do it. Make sure you ask for a loan officer, not someone who helps with the “Home Affordable” programs. They may send you to someone for a modification or short sale negotiation which is not what you want.

  • Debbie

    Are second mortgages, required to subordination if I am doing a harp refi on my first? Are there certain restrictions put on them by me refi my 1st with a harp?

  • Debbie,

    Subordinations are always required because your 2nd lien holder would move to 1st position without a subordination agreement. No lender will pay off your first mortgage to be in second position.

    I’m not sure what restrictions you may be eluding to, but the 2nd lien holder may restrict the company doing your refinance by not approving a subordination request. Who is your 2nd mortgage with?

  • Dawn Skiba

    Keane, Thank you for the insightful website. Let me share some background with the hope you can point us in the right direction. We were part of a loan acceleration program for the 1st 8 years of our mortgage, including when we refinanced in 2007. Therefore, we have never been late and paid extra principal per year. Our 20yr loan is with Chase, is a Freddie Mac loan with no PMI, is not upside down and we do not have a 2nd mortgage. Due to the economy, we had a huge reduction of income. We took the loan off the accelerated program about 6 months ago and before we were even a day late, we called Chase (branches & corp) asking what our options were. They could not offer us anything except a loan mod, which we probably wouldn’t qualify for since we weren’t late. We were just approached by a Chase branch for a 30yr HARP loan down from 6.5% to 5% interest with a savings of $400/mo. We have been late now but never over 30 days. They approached us with a no credit check, no appraisal, no out of pocket fee, almost guaranteed approval. We go in skeptically to find they did run our credit (went down from 700 in 2007 to 500 now) and there was a $395 application fee. We were afraid about it being non-refundable as finances are tight. He assured us that he has not seen anyone not get approved under this program so we went ahead. We were not approved because we are late on our Chase credit card. We have already cashed in our personal retirment accounts & took a max loan on our work 401K to live and cannot get up to date (especially -$395 app fee). Help! This whole thing has been a disaster and dishonest. Can they deny us because of our credit card w/them? Can we even go through another lender with our low credit score and without an appraisal? BTW-The lender said he is working on getting our fee refunded because we complained of being mislead. What can we do??? Thank you for any guidance you can provide.

  • Dawn

    One more thing, our house is appraised by them at $181,000 and our loan would be $146,000. We are in WI.

  • njcondorefi


    I purchased a condo at $330k in 11/2005 using an 80/15 piggyback with 5% down. 1st loan is currently at $244k principal at 5.875% fixed (30-year fixed). 2nd loan is currently at $46k principal at 7% fixed (15-year ballon). Wells Fargo is current servicer on both. FNMA guarantees the 1st loan. I believe the property would appraise at $300k today leaving my current CLTV slightly above 95%. My credit is 775+.

    I’m not sure that I’ll be holding my place (as my primary residence _or_ as a renter investment property) much longer 15 months because it is only 1 bedroom and my family is growing. Given this, I’m hesitant to pay any closing costs doing an FHA refi or other refi that might result in a break-even period. However, there is a _chance_ I might rent my property. Therefore, I think it is prudent for me to do HARP and realized some cashflow savings now and then investigate refinancing the whole shebang in 15 months _if_ I decide at that time that I will keep the property as an investment rental. Do you agree with this approach?

    As far as pricing, I’ve shopped around and I’ve found a direct lender (Network Capital Funding Corporation) who is quoting me 5.25% with 0 points/closing costs to refi my first loan via HARP. This would reduce my monthly P+I on my 1st loan by ~$214/month without me having to pay any closing costs. Seems like a win to me. My existing servicer quoted me a higher rate that included points and costs. Amerisave told me that they don’t do HARP programs, etc. Local banks and credit unions that I checked also couldn’t compete with Network Capital’s pricing.

    Looks like rates fell over the past week slightly and the direct lender who quoted me 5.25% said that its getting to the point where he might be able to float me down to 5.125%. When the appraisal comes back, I told him that I have the capital to get down to a 95% CLTV by paying down the balance on my 2nd loan a bit. I can’t avoid the condo ding, but based on DU Refi Plus pricing, I don’t think there is any other pricing ding that would snare me.

    Do you think this is the right refi for me? Do you think the 5.25% no-cost pricing is competitive/top-tier?

  • Dawn,

    I’m sorry to hear your situation. Chase can choose to deny you. When your credit was in tact, that refinance would’ve been easy for Chase or an outside lender. They are your only chance now and if they turned you down, I’m sorry to say you won’t have options. However, pay the credit card back to current and work your credit. You have plenty of equity and room for value to go down further and still be eligible. They extended HARP until June of 2012, so that’s plenty of time to restore your credit. In 6 months of paying on time and keeping your credit card balances low, you should be at least a 620 which should be enough for most HARP lenders to help you. Good luck!

  • njcondorefi,

    I think that pricing is fair. If you can get the first mortgage under 75% LTV, you’ll get a price improvement. Other than that, there’s not much more you can do other than pay off the 2nd.

  • Jeanne

    I have a conventional mortgage (30 year, 6.875, 21 years remaining, Fannie Mae, LTV 60% conservatively) I am also self employed, 23 years, sole proprietor (Sched C). Business itself is paid in full, but carry a debt of $38,000 from expanding and major equipment purchases from a few years back. No other debt. Credit score 788. I am still depreciating (a lot) of build out and equipment purchases, so my DTI is way off to try and refi. And, of course, as a Sced C filer, there is no differentiating between business and personal. My loans that originated from business are considered as personal debt for DTI, from a mortgage standpoint.

    For the past 2-3 years, I have been watching the mortgage rates and loan availability, in an attempt to refi to a lower interest rate. The no doc/low docs would have been handy, if they were still around. Seems to be that there was a great purpose to those loans, but very abused, therefore not going to be making a comeback. I keep hoping that I will find something in the mortgage market that will accommodate solid credit and equity for the self employed. It’s only getting more difficult!

    My only options seem to be to incorporate (more income taxes, though), or forego some business deductions to raise my bottom line for DTI (more income taxes) and then to wait for 2 years to reflect higher personal income. Or to just wait 2 more years until depreciation drops off, and another 2 years to have Sched C that would reflect a higher income (not sure rates will still be low in 4 years).

    I happened across HARP and am wondering if I did a Refi Plus through my existing lender (Citimortgage), would they verify income? The wording seems a bit grey on Fannie Mae’s website. It sounds as though Citimortgage does a verbal verification of income, but when it is underwritten do they pull my tax returns? It almost seems to have a few parallels to the streamlined FHA refi’s, where they don’t recheck income.

    I also saw that I can refi through any company (Citimortgage has better rates than what I am paying now, but other lenders are offering better rates than Citi). The DU Refi Plus is also vague about income verification, but seems more likely that they would want written documentation verifying income, due to it being a new lender.

    Also, would they do an appraisal? Interior and exterior? Or will they just use my property tax bill, which reflects the 60% LTV. I have no problems with the LTV, but am doing a lot of remodeling (roof which will be done soon, but interior-paint, flooring, woodwork, lighting, etc will take a while, as I am doing all the work myself and expect that it will take the better part of the year) and have heard that they want all remodeling completed to refi.

    Sorry about the lengthy post. I wanted to provide as much info as possible. Any info on HARP or any other loan availability for my situation would be appreciated. Thanks!

  • Casey

    My ex-husband and I share our house 50-50 due to the fact that we have children and want to keep them in the home, but and we have a divorce decree that states that we are each responsible for half of the mpnthly mortgaes until the house sells or one of us couls re-finance it. We have tried to sell the house for the past 2 years with no luck. Upon hearing about the HAPR re-finance, my current husband, in agreement with my ex-husband, and I tried to re-finance the house with the HARP loan through our current lender, Citimortgage. After weeks of going through the process, paying an application fee and home appraisal fee, subordinantion for 2nd Mortgage fee, and were told it would all go through fine, we were denied by CitiMortgage using the HARP loan due to the fact that my ex-husband and I are paying the mortgage equally out of a joint account that I share with my Ex-husband for household expenses and expenses for the children. CitiMortgage said that due to FannieMae guidelines, we were not eligible because the mortgage was not being paid by me solely (or whomever would be on the new mortgage, even though I bought the home with another person in the first place and can not afford it myself) for a period of 12 months. We also gave them a copy of our divorce decree that shows that we are equally responsible for the mortgage. Now, my question to you is, if we have the mortgage be paid out af my new husband and my joint account for 12 months, try again to use the HARP re-finance program in 12 months, do you believe will we then be eligible? We are being told by Citi that the HARP does not look at debt to income and that if the people that will be on the new loan can prove they have been paying the mortgage for 12 months from their account, we will be eligible. My ex will still pay me half of the mortgage to get around this, but do you think this would work? Do you think an Underwriter will look at what deposits have been made into my account over the year or just that the house mortgage is being paid from an account that will have the our name on the mortgage anyway? We have to do this because my ex will not vacate the house until his name is entirely taken off the current mortgages, thus is why he still pays half and will just give me the money for his half to pay the mortgage out my new husband and my account until we can refinance.

    Here is the current scenario:
    We owe $243,000 to Citi for first mortgage
    We owe $20,634.64 to a Credit Union for 2nd mortgage
    House just appraised a bit high at $320,000, but doe the economy, we would NEVER be able to sell it for that.
    Assessed at $255,000

    My credit score is 698 and my husbands is 659. we have never been late on any payments.

    Thank you Keane. Any advice would be appreciated. This is so disheartening.

  • Casey

    My ex-husband and I share our house 50-50 due to the fact that we have children and want to keep them in the home, but and we have a divorce decree that states that we are each responsible for half of the mpnthly mortgaes until the house sells or one of us couls re-finance it. We have tried to sell the house for the past 2 years with no luck. Upon hearing about the HAPR re-finance, my current husband, in agreement with my ex-husband, and I tried to re-finance the house with the HARP loan through our current lender, Citimortgage. After weeks of going through the process, paying an application fee and home appraisal fee, subordinantion for 2nd Mortgage fee, and were told it would all go through fine, we were denied by CitiMortgage using the HARP loan due to the fact that my ex-husband and I are paying the mortgage equally out of a joint account that I share with my Ex-husband for household expenses and expenses for the children. CitiMortgage said that due to FannieMae guidelines, we were not eligible because the mortgage was not being paid by me solely (or whomever would be on the new mortgage, even though I bought the home with another person in the first place and can not afford it myself) for a period of 12 months. We also gave them a copy of our divorce decree that shows that we are equally responsible for the mortgage. Now, my question to you is, if we have the mortgage be paid out af my new husband and my joint account for 12 months, try again to use the HARP re-finance program in 12 months, do you believe will we then be eligible? We are being told by Citi that the HARP does not look at debt to income and that if the people that will be on the new loan can prove they have been paying the mortgage for 12 months from their account, we will be eligible. My ex will still pay me half of the mortgage to get around this, but do you think this would work? Do you think an Underwriter will look at what deposits have been made into my account over the year or just that the house mortgage is being paid from an account that will have the our name on the mortgage anyway? We have to do this because my ex will not vacate the house until his name is entirely taken off the current mortgages, thus is why he still pays half and will just give me the money for his half to pay the mortgage out my new husband and my account until we can refinance.

    Here is the current scenario:
    We owe $243,000 to Citi for first mortgage
    We owe $20,634.64 to a Credit Union for 2nd mortgage
    House just appraised a bit high at $320,000, but doe the economy, we would NEVER be able to sell it for that.
    Assessed at $255,000

    My credit score is 698 and my husbands is 659. we have never been late on any payments.

    Thank you Keane. Any advice would be appreciated. This is so disheartening.


  • Casey

    Sorry, Didn’t mean to submit twice. :)

  • Jeanne,

    Under the manual underwriting guidelines for Fannie Mae’s Refi Plus, your income won’t be evaluated. However, it’s required that your loan have been originated and been with Citi since you’ve had it. If the servicing was moved to them, you would need to requalify the income.

    If your loan was always with Citi, call them right away and get the refinance done!

  • Casey,

    Those guidelines must apply to the Refi Plus program. If you contacted an outside Fannie Mae lender who participates in HARP, they won’t care who pays how much of the loan as long as they can qualify for the new loan on their own. If you can qualify to take over the loan on your income without the assistance of your ex-husband, you can refinance. The same applies for him.

  • Irma

    WOW! Thanks Keane
    I have learned alot regarding HARP.
    I am looking to do refi under HARP. Currently with HSBC owe 392,000 @ 6.125. Homes in area at about $360,000. I told Citi our home maybe at low $400,000 because I’m wasn’t really sure.

    So far have contacted Wells, B of A, Chase & Citi. Only Citi is willing to do loan with 5.375 $475 applic. fee $700 closing costs & $1,400 escrow account. If home is appraised for less will rate go up? Can you give me few more lenders who are doing this refi’s in California.

    Once again thank you so much!!!

  • BJ

    Hi Keane,

    My loan was modified on June 01, 2010 with the interest rate of 3.875%. The current balance is $267k. Per zillow.com my property value is worth $281k but similar properties in my neighborhood are selling for $220k.

    My investor is Fannie Mae, serviced by Bank of America. I am residing in the State of Georgia. My goal is to lower my monthly payment.

    My questions to you are;

    – Am I eligible for the HARP program?
    – Am I better-off applying for the HARP program?
    – How does it work? What is the procedure?
    – What is the drawback for me? Credit score, back payments, etc..
    – Will there be fees for HARP program?

    Thanks for your time!


  • Nikki


    What are the DISADVANTAGES to the HARP program? I am a bit skeptical…but of course would love to lower my payments. They are all about HURRY HURRY~ so it makes me nervous. I have been offered a rate reduction from Chase from 5.88 to 5.13 (.75 diff) thru the HARP/FNMA refi program. All fees completely waived. They are my current lender. Do you think I should still shop around for better rate? Live in Texas. Home appraises at $238k…I owe $191k. Great credit, no lates.

  • Nikki,

    It’s a regular refinance, so you need to make sure the fee/rate makes sense for your goals. They may have thought the program was expiring because it was scheduled to next month but they did extend it for another year.

  • Michael

    This is a duplicate of a Question I entered under the Investment Properties comments. Sorry, it should be here.
    I’m glad I found your website.
    I have an interesting one for you.
    I(61 years old) and my wife are Peace Corps volunteers in Bulgaria(since May of last year). I took an early retirement option at work because my job was going away with the space shuttle program. Our primary residence and only property (in Florida) has a house and an efficiency apartment and the house is currently rented to help with our payments. We keep the efficiency free for our use in case we visit home. We have a FannieMae 1st with Citimortgage with ~$95,000 and a HELOC with Chase at ~$87,500. Not underwater yet, but still heading that way. I have not yet turned on a small pension payment – as rent payments and cash on hand have kept us current. I would like to do a HARP refi from my current 15 year to a 30 year mortgage which will drop my P&I to $500+. Rental income is $950 and at this point I am willing to turn on my pension payment which would also cover payments. The improved cash flow will help us focus on the HELOC. Can a HARP refi be done here?
    Backstory: I tried to refi with Citimort back in 2010 while I was still working and Murphy’s Law prevailed in such a way that the process stretched beyond my “retirement” and our joining the Peace Corps. In the end the underwriter declined the loan after the lock date (I was trying to extend)for lack of income while I was trying to get some official paper from the Peace Corps. Peace Corps income for us is an ~$600/month stipend and $550/month deferred income paid to us on our return (unless otherwise arranged). We do not pay rent or have any car or other significant payments. I just recently talked to a representative at Citimort and was told that their underwriter would not sign on HARP refi EVEN IF I turned on my pension revenue stream(because the pension income was not established for two years (?)). Would this be a Citimort policy beyond what I understand from the HARP eligibility guidances?
    So do you think I can HARP my house? I would appreciate any advice and guidance.

  • Don

    I have a fha loan of about 195,000 on my home, at 5.25% apr purchased 1 yr ago. Just took out a home equity loan fixed at 6.99% to pay off all my debt 50,000.

    My house appraised at 244,ooo a yr ago. I have however updated my kitchen totally new everything — granite tops, stainless steel appliances, oak cabinets… new undermount sink, new tile flooring… refinished wood floors thruout house, new oak railing inside… updated electric to 150amp,,, and new meter pan outside… recently added central air,,, and new furnace.

    My question is Should I try to refinance to lower my apr. and add my loans together… there is no penalty for early payment on my home equity loan. I plan on staying in my home for the forseable future.

  • PG

    My mortgage is currently serviced by Chase. I received a call today advising me that I qualify for the Chase HARP program. We are not the people in the situation HARP was designed to address, but if I can lower my monthly payment and reduce the number of years on my current mortgage, I will take. Do you know if Chase HARP program verifies your credit score?

  • Don,

    FHA loans aren’t eligible for HARP but it sounds like you may have other refinance options availbale to you. You can see if there’s enough equity in your home to do a cash-out refinance and wrap your equity loan into your first mortgage. FHA mortgage insurance is higher now but rates are also lower. You’ll be capped at 85% of the newly appraised value.

    If your equity loan is 1-year old, you can wrap the two loans together at a higher amount (then considered rate-and-term by FHA guidelines) which allows up to 97.15-97.75% of the appraised value depending on the area you live in.

    You would have to look at the numbers to see if it pencils but you may have options out there.

  • PG,

    When you say HARP wasn’t designed for you, are you indicating that you’re in a type of hardship? HARP was designed for homeowners who want to refinance and need a program that is flexible on the value of the property.

  • PG


    No.. I am not in any hardship whatsoever. My LTV ratio is around 82%. I am not in any financial hardship. My current loan was originated by Chase in Jan. 2009 and at that time my LTV ratio was around 75% so I had no PMI. So, I received a call today from Chase advising me that I qualifed for the HARP program. They quoted me a 25 year rate of 4.625 with 0.125 points. In addition that quoted me a 25 year rate of 4.875 with a rebate of 1.625. What is your opinion on the Chase HARP program. Based on my research so far, there are some good and bad stories.

  • PG,

    The key is to work with a good loan officer. The program has not downfalls but mortgages are not the same as they used to be. You need a good consultant to guide you through it.

    Let me know if you want a contact for Chase. I have a very good loan officer I refer Chase clients to.

  • PG


    Yes.. Please provide me a contact for Chase. However; I was contacted by a local Chase officer yesterday. In addition, I am looking for a good mortgage broker that services the Virginia area. I have been looking on Zillow.com at the reviews and ratings of lenders. I would think that a mortgage broker would be able to offer me a better rate and low closing cost than one of the national lenders. Can you recommend a good mortgage broker that services the Virginia area.

  • mad at Chase

    What’s the status at getting lenders to HARP Refi LPMI loans? Everything was fine with my refi until CHASE discovered I have LPMI. They quickly told me I was not elligible for a HARP refi and ended the conversation. now what?

  • mad at Chase,

    I could double check with Chase but I don’t think there are any options.

  • mad at Chase,

    I confirmed that LPMI loans are still ineligible with Chase. Sorry!

  • Janett

    hi Keane,
    i have an 80/20 one with IBM for 288.000 and the otherone with citi for 69000. My house is worth around 300.000. Can i do a REfi to put them together in one loan for 30 years and a fix interest??? my first loan is own by fannie Mae.

  • Keane


    You can refinance the first mortgage but not the 2nd mortgage. Citi should do the subordination for you allowing you to refinance the first mortgage. IBM is just a servicer so you’ll need to contact a Fannie Mae HARP lender.

  • Julie

    I am divorced. My ex and I have tried to sell for 2 years. The home is underwater; we owe about 40K more than house is worth (1st and 2nd mortgage). I can afford the loan on my own, BUT: The only way to refinance without having to front $70K (to get loan to 85%) is to go through HARP Refi program. Of course, I just learned about the 12 month rule, where I would have to pay the first mortgage out of my individual account for 12 months in order to qualify for a loan without his name.

    Question: I have paid into a joint account, from my account, more than the loan amount for more than 12 months. The mortgage was then paid out of this joint account. Can I use this as evidence that I paid the first mortgage for the last 12 months?

    I need to separate my finances from his, so the next option is going to be to sell at way less than we owe, and take an unsecured loan.

    Any advice would be greatly appreciated!

  • Julie,

    Please explain, you’re being told that you must prove you’ve been paying the mortgage out of your account? This is only typical if you can’t prove that you’ve had any interest in the past, which it sounds like you have.

    Have you determined if your loan is backed by Fannie Mae or Freddie Mac?

  • Julie

    Thanks for the quick reply! The loan is backed by Fannie Mae.

    I’d like to assume the entire loan myself, and remove my ex-. The problem is this part of the HARP rules:

    “If a borrower is being removed through the transaction, can funds from a joint account with the remaining and prior borrower be used to document that the remaining borrower has been making payments “from their own funds?”

    No. If a borrower is being removed from the transaction, the remaining borrower must demonstrate that they have been making payments for 12 months from their own funds. Funds from an account that is held jointly by the remaining borrower and the borrower being removed are not deemed to meet this requirement. The flexibility to remove borrowers is designed to provide the ability for a borrower to refinance the loan when the prior borrower has not been, and will no longer be, contributing funds for the payment.”

  • Julie,

    That’s only partially correct. The guideline they’re referring to is a section in the Fannie Mae guide called the “Continuity of Obligation”. Only one of four fators must be met. Here is a excerpt:

    “Requirements for Continuity of Obligation
    For a refinance transaction (either limited cash-out or cash-out) to be eligible for sale to Fannie
    Mae, there must be a continuity of obligation if there is currently an outstanding lien that will be
    satisfied through the refinance transaction.
    Continuity of obligation is met when any one of the following exist:
    • At least one borrower is obligated on the new loan who was also a borrower obligated on the
    existing loan being refinanced.
    • The borrower has been on title and residing in the property for at least 12 months and has
    either paid the mortgage for the last 12 months or can demonstrate a relationship (relative,
    domestic partner, etc.) with the current obligor.
    • The loan being refinanced and the title to the property are in the name of a natural person or
    a limited liability company (LLC) as long as the borrower was a member of the LLC prior
    to transfer. Transfer of ownership from a corporation to an individual does not meet the
    continuity of obligation requirement.
    • The borrower has recently inherited, or was legally awarded, the property (divorce, separation,
    or dissolution of a domestic partnership).
    Loans with an acceptable continuity of obligation may be underwritten, priced, and delivered as
    either cash-out or limited cash-out refinance transactions based on the requirements for each type
    of transaction.”

    If you are on title but not the loan, then you must show you had an interest in paying on the existing loan. If you’re on the current loan, you shouldn’t need more to qualify.

  • Jill

    I am interested in applying for the HARP program. Do you know of any participants in the Milwaukee area? Thanks.

  • Keane


    Can you email the details of your situation?

  • LPS

    My situation is unique. I have 33 Fannie loans with Chase, 4 with GMAC, 1 with Citi. I also have 7 Freddie loans with Citi and 3 Freddie loans with Sun Trust. These are all investment properties and all have better than 80% LTV. All my mortgages have 6.5 to 7.125%, 30-year fixed rate.
    Here lies the problem: (a) vacancies, deadbeat/ non-performing tenants,tenant turn-over are all up, (b) Rents are down back to 2003 level,(c) All expenses and particularly NJ property taxes are up, (d) Repairs are getting frequent & more expensive, (e) Newer entrants as Landlords (both who are Landlords reluctantly and those who are buying properties in the foreclosure market are bringing the rents down for everyone.

    In short, the collected rents cannot support the mortgages and ever rising expenses. Every month, I am hitting my IRA to stay current with the payments/expenses. I am interested in doing ‘streamlined’ HARP re-fi, and the only way I would qualify is if it is done ‘streamlined’, no income verification, no ratios, etc.

    Here is global problem: (a) Chase is agreeable to do HARP re-fi but only those loans that they service, and they are quoting high rates of 4.875. Chase will not do HARP for any loans serviced by other lenders; (b) GMAC will do HARP for their loans, but has to be fully documented with all income quals etc., (c) Sun Trust will not do anything; (d) Citi Mortgage will not do anything either.

    What are my options? How long can I hang on? Should I send the jingle mail (send the keys back)?

    Do you have a list of Fannie/Freddie lenders who will do ‘streamlined’ HARP for me?

    Here is the problem: (a) Chase is willing to do streamilned

  • Diana

    Hi Keane,
    This site has been most helpful! Thanks! I am interested in doing a HARP loan but have run into many roadblocks.

    CCO is the 2nd mortgage holder on our home at 55,000. They were the ones who initially told me of the program as they declined the subordination on our first refi attempt thru VA. We paid 288, 000 for our home and it appraised for 245,900 thru the VA. 2 different CCO refi loan officers told me they would approve the subordination on a HARP.
    Anyway, I contacted my 1st mortgage holder (205,000) and began the HARP program process. I called CCO just to be sure they would approve the subordination (something told me to triple check) and NO on in the company had a clue what I was talking about! I spent 1 1/2 hrs on the phone going in circles and was actually told that I couldn’t speak to someone in the subordination dept because they do not answer the phone nor did anyone else in the company that I did speak to have a clue as to what the HARP program was or how subordination work! How frustration it was.

    I am not sure if we should bother shelling out another $450 for another appraisal only to be shot down for a subordination. Should we wait until the market picks up a little?

  • LPS


  • Autumn

    Hi Keane,

    I’m wondering if you have any information regarding refinancing if you are far underwater. For instance, we bought our house for around $255K in 2007 and according to zillow.com (which is a low estimate since we have many upgrades that are not taken into consideration), our house’s estimated worth is approximately $95K. We are not currently experiencing hardships. Are there any programs where we could refinance our original mortgage amount at the current interest rates? Are there any options at all given the huge decrease in our home value? Thanks in advance for your reply.


  • LPS,

    Sorry for my delayed response. You’re stuck on the Freddie loans because they have a 4-property-financed limit. That’s why Citi and Suntrust won’t help you.

    4.875% is a good rate for rental properties. Could you get lower shopping them? Yes but only Chase can do them with no docs. You can likely get lower if you can go full-doc with another Fannie lender.

    A good loan officer who knows how to read Schedule E’s for tax returns can see if you can get your loans done. There’s no reason to go to GMAC if they want docs. They’re going to do a “DU REFI PLUS” HARP loan which any Fannie lender can do.

    What state are you in?

  • Autumn,

    The only options are a short refinance which for the most part, was a big failure. Unfortunately, HARP is your only option if you have a loan that is eligible.

  • Diana,

    Your loan officer for your 1st mortgage HARP loan should be able to help you with the subordination process. CCO is likely more willing to work with you on the subordination now. Only talk to their “Subordination Department”.

  • Chris

    Hi keane,

    A few quick questions regarding a refi…

    1. Does a low owner occupancy rate for my condo complex (30%) prevent me from being approved through HARP? I’m in CA and this is a second home in FL that I’m trying to refinance.

    2. Are there income restrictions to apply through HARP (can I make too much money)? This is of course assuming I don’t want to refi through my current bank (Chase).


  • Chris,

    On HARP loans, condo approvals and project status is not reviewed. There are no income restrictions like modifications, which are for homeowners with a hardship. HARP is for homeowners who want to refinance but do not have the traditional equity to qualify. All other requirements, such as credit, assets and debt-to-income are reviewed like a regular loan.

  • Rick

    My wife lost her full time job a few years ago and were unable to pay our credit cards. Could we do a HARP loan to pay those credit cards off now? My wife now works part time.

  • njcondorefi

    Rick, you might even qualify for HAMP (due to the documentable hardship — either a significant reduction in income or increase in expenses that was beyond your control).

  • Rick,

    To get a HARP loan from a lender outside your servicer, your her income (if used to qualify) would need to be deemed allowable based on her work history and gap of work.

    If you apply with your current servicer, the income will not be reviewed as closely and you should qualify now that she’s back at work.

  • Frances

    Do you know anyone in California that deals with Harp loans. I currently have a mortgage with Chase. Currently 5.625 and they are offering 4.875 but the closing cost are $4,962! Is it worth it to pay so much at closing when they are not even going down a point? Please advise.

  • Jim

    Hi Keane,

    I’m recently divorced with a Freddie Mac loan that’s underwater by about 30k (owe 133, worth about 100k). I was looking into doing a HARP loan to get my ex off the loan, but I ran into the same issues as someone else before me, which is that Chase refuses to do it until I’ve paid 12 months into the account from my own personal account, and not a joint account (which it was on before).

    I saw your stipulation back to that lady discuss the Fannie May version of that, which allowed for that to happen, but not for a Freddie Mac.

    Also, I’m in IL, where can I go to shop around my Freddie Mac HARP refinance? I’m worried Chase isn’t going to give me a solid rate with a near 125% LTV.

    Thanks! This site is a wealth of information so far.

  • Dan

    Hi Keane,

    I have a Fannie Mae loan with PMI recently transfered from BOA to Green Tree. BOA was a pain to deal with, I was originally told I could do a HAMP and told me to start paying the lower payments (I didn’t since I had heard that this goes against your credit and they mark you as behind payments) then months later they said I did not meet requirements. I then tried a HARP but by the time they started doing PMI HARPs my homes LTV had already dropped to 125%. Their limit for PMI was 105%.

    Now I am talking with green tree and the person there said they only did HAMP and when I mentioned HARP they said what is HARP? I was shocked that someone in that business never even heard of it but they claimed that Green Tree does not do that. I would like to know what options I have at this point with a Fannie Mae loan with PMI and about 125% LTV and if you know about Green Tree’s reputation on these issues. I have a steady income but my mortgage payments are definitely way over 31% of my gross monthly income. I just really need something done, I have made all my payments on time and am stuck at a 7.25% rate and it is killing me at this point. Thanks.

  • @Frances,

    I emailed you personally


    At that loan-to-value, very few lenders can help you other than Chase. A Mortgage Broker approved with 53rd Bank may be able to help you. They lend to 125%. I use them regularly for these scenarios when I have clients who need HARP loans over 105%.


    Greentree is primarily a loan “servicer” and may not have the normal loan originating departments that a lender may have. Even if you do talk to a lender who can do PMI HARP loans, you’ll likely be limited to 105% as well.

  • Carl

    Hi Keane –
    I currently have a VA loan for a home in California. The payoff is 692K. Recently, the house was appraised for 660K. Can I still do a VA streamline? Can I do a loan under HARP? I’m not sure which is the best way to go and I don’t know that the VA will allow a loan when it appraises for less. If a HARP loan is the way to go, then can you recommend someone?


  • Keane


    VA loans are not eligible for HARP. VA has a loan program that doesn’t require an appraisal when you refinance a VA loan to another VA loan called an Interest Rate Reduction Refinance Loan (or IRRRL) but most lenders won’t lend on these without an appraisal.

  • Melissa

    Hi Keane,

    I am in the exact same situation as Dan(down to the 7.25 interest rate).
    It can’t be true that hard working folks who have not missed a payment
    and have good credit cannot refinance because our homes are now
    worth next to nothing?

    If we all stood up and collectively stopped paying, what would the banks do then?

  • Keane


    If you need a PMI HARP loan, I may have someone for you. I’ll email you their contact info.

  • Keane


    If you need a PMI HARP loan, I may have someone for you. I’ll email you their contact info.

  • RAUL

    Keane I have a triplex in CA with an interest only loan that I am interested in refi through HARP but no luck with BofA who states they have suspended investment refis through HARP…this month loan was transferred to GREEN TREE for sevicing only who can you refer me to …to make this streamline refi happen?

  • RAUL

    Keane,,i forgot to mention that my loan is FANNIE MAE.

  • Raul,

    Yes, my contact at B of A confirmed this change with me as well a few weeks ago. I’ll email you directly in a bit.

  • JK

    Hi there!
    Thanks so much for all this information. I live in GA, and fit the HARP guidelines perfectly…until I called BOA today and found out they won’t do a HARP refinance after August 19th if your second mortgage is with another lender. Our home is now worth $237,000. We have a first mortgage with BOA for 215,000 and a second mortgage with suntrust for 64000. Are there any other lenders that we could talk to about a refinance? our loan is a fannie mae, and we have no late payments, etc. We are looking to lock into a low rate for 15 years. Thanks in advance!!

  • Erin


    I have a rental property in California. I did 100% financing and it is backed by Freddie Mac thru Wells Fargo. I contacted Wells Fargo who said I didn’t qualify and could do nothing for me. That was April 2010. But after reading your website, is there anyway I can refinance? I can make the payments, would like to keep the property but need to lock it in. I bought before 2009 though, I am unsure of the purchasing requirements. Any information you have would be helpful.

    Also, I have 125 LTV but that’s only on my first loan. I could attempt to pay off the HELOC loan and then just refinance the 80% but I believe you said they wouldn’t allow that. My husband is not on the loan bc I bought it prior to our marriage. He could possibly provide some assistance with money down.

    Any information you have would be helpful.

  • JK,

    Honestly, you may not have any options. The reason is your 2nd mortgage is with Suntrust. Suntrust currently only does HARP loans up to 95% of your home value with a first/second mortgage AND they won’t approve a subordination unless it’s at those levels.

    Even if you can find a lender who’s willing to do this, you must convince your 2nd mortgage company to subordinate which Suntrust won’t do under your circumstances. You would have to pay them off or pay down the balances to 95% of the appraised value, unless Suntrust has changed their guidelines.

  • Erin,

    What is the reason Wells Fargo said you couldn’t qualify? Is your loan backed by Fannie Mae or Freddie Mac?

  • Matt


    Great Article! Can you help me evaluate my situation.
    1st – 255k 6.5% with GMAC
    2nd – 19k 8.75% with GMAC
    Home Value 206k no PMI

    I would like to refi to 3.5% at 15 or 10 years.
    The loan is with GMAC mtg and IS a Fannie Mae Loan. Can I refinance using HARP 125% LTV program. Is the 2nd included in the LTV? I have a 722 credit score and if I need to can pay off the 2nd. Any advice?

  • Jim

    purchase price 1/2005 – 309,900
    down payment – 30,990
    Current balance: 253,128
    current home value – approx 240-245,000
    rate 6.25%
    mortgage with citi and with pmi
    would like to refi through HARP but can we if we have the PMI? It is a FNMA loan. Was not with Citi originally, I believe they purchased it or took over servicing of it. Also, does HARP impact credit rating at all? We have above 720. Would we qualify for HARP or are there other options?

  • Hi Keane, I have a SBA disaster loan (2.9%) as my first lien and Fannie(6.5%) as second lien holder, the SBA made Fannie move to second before the loan was written. The combined total of both is 350,000, with a house value of 300,000 that I bought in 2007. The Fannie loan is gerater, has a higher rate, and is the second lien holder, is there any loan program that I can use to help get my payments under control? Or do I just walk away? The SBA has a hard time playing with others when it comes to disaster loans!Please help.

  • Jason,

    Unfortunately, you’ll never be able to do a HARP loan in 2nd position. If the SBA loan won’t move to 2nd position, you’ll need to keep the loans you have.

  • Jim,

    HARP is a traditional refinance with expanded guidelines, so it will not impact credit. If Citi Mortgage won’t do your refinance, let me know and I can refer you to someone who can.

  • LRC

    This is not a HARP question but I hope you can perhaps help. I have a rental property that I am having difficulty meeting the mortgsge…unable to put stable tenants into the property. I am just ready to throw in the towel. I have an offer for a short sale … I owe apprx. 120K on the property after nine months on the market the only offer I have received is 40K. I know there are tax consequences. My question is should the bank not accept the short sale and I walk away and allow foreclosure can I be sued for any outstanding balance? Any suggestions? The property is in Illinois.

  • Keane

    Sorry guys, website glitch. Let me know if you posted on other threads and I’ll get you removed. Thanks!

  • Keane

    Do you want your voice heard? I have a writer for the Wall Street Journal who’s looking for homeowners to interview. Please email me if you’re interested. Thanks

  • meghan combs

    I’m trying to do a harp refi with 5/3 bank and the initial gfe is way off now that our appraisal is back and there are lots of fees being added. Our refi goal is to free up cash flow every month with little out of pocket at closing.What’s your advice based on:
    1st: payoff is $164,525 30 yr 5.25% ($1027 pmt)
    2nd: bal: $55,600 fixed equity loan 6.65% ($617 pmt)
    appraisal: $226,000
    credit scores above 720
    ltv is causing fees to pile up and closing costs are approaching more than $3000. This seems like more troubel than it’s worth to save $200/mth. Is it worth doing this or should we consider an FHA(I have never paid pmi and don’t want to start now.)

  • Meghan,

    What’s the home value? You may want to look closely at your fixed second loan. They often have a balloon payment and may be well worth paying off to incur a PMI charge.

    If your 2nd mortgage was used to buy the home, you can finance up to 95% of the value on a conventional refinance with cheaper PMI options than FHA.

  • meghan

    The appraisal was $226,000 and no the equity loan was NOT used to purchase the home. Do you mean pay the entire 2nd’s balance of $55,600?…that’s not possible…don’t have that kind of cash and we would be doing a conventional refi(instead of a harp) if we didn’t have the second loan.

  • Meghan,

    It’s worth looking at a FHA 15 year loan. The mortgage insurance on a 15 year loan is much less and so is the rate. The payment will be more but most of the increase will be just mortgage insurance. More of your payment will work for you.

  • Vish

    I am trying to refinance my son’s condo in Santa Clara county from 30 yr fixed to 20 yr fixed.I am the coborrower. around 80%LTV. Service by WF, Fannie MAe loan. Can HARP work for this?

  • John

    1st of all, I want to thank you – you seem to be very knowledeable on the finance options for homeowners and you seem to be the only one sharing this knowledge openly.
    We have been trying to refinance 1st (w/CitiMtg:FreddieMac) & 2nd w/HSBC to lower total monthly housing expense but have not gone thru with paying for appraisal because we fear our value will not be where we need it. we owe $155,000 on 1st & $88,000 on 2nd ($243,000), house values have not dropped drasticly in my area – it’s kinda of scattered, hit or miss and unfortunately, we fall in the ‘hit’ loosing just enough value to put us underwater by about $15k – $20K. The 2nd is not prchs money but is almost 6yrs old. We had a modification (not HAMP) on the 1st in 2009 lowering the rate a little to 4.875 & extending the term to 40yrs, the 2nd w/HSBC remained the same. I would like to know if you have any suggestions on how to restructure the housing debt and if you believe this is a viable solution – ?refinance the 1st up to highest LTV using the money to pay down the second and then recast the remaining balance on HSBC 2nd to 5 or 10yrs to lower the current payment OR ?get a signature loan to payoff the remaing balance. We don’t have the money to pay it off ourselves or even the money for closing costs so we’d need the best solution for little or no out of pocket possible. What’s your opinion on whether HSBC would be willing to extingquish the balance? Our credit is good – scores range between 680 & 720 – we carry a high debt load of unsecured & auto’s but we manage and pay our debts timely. Would the FHA short refi work for us? Should we just negotiate with Citi & HSBC or should we shop around? Any advice or suggestions you may have are greatly appreciated.


  • ad

    Kindly remove me as well. Unsubscribe link not working.

  • Mike

    Do I have to do my HARP through my original 1st mortgage bank (in my case, BofA), or can I go through any bank for a HARP?

  • Mike,

    There’s a version of HARP for B of A and a version any lender who participates can do.

    To find out which version is best for you, you should shop around. B of A may be able to do it with less paperwork but they may charge a higher rate.

  • Mike

    I just got off the phone with BofA. I qualify in all areas for a HARP except that my second is with PNC, and BofA stated that as of 8/24/2011, they no longer work with outside banks on subordinations. Is that allowed? What would my options be?

  • MS

    Like Keane said there are two versions of HARP. Lot of people (like me) though have had troubles going thru Option B. There are better chances with the same servicer (in your BofA) rather than going with a different servicer…

    – MS

  • John,

    It would be tough to refinance under HARP, as HARP is a 1st mortgage-to-1st mortgage program only, so it does not fix your 2nd. Also, my experience has showed that modified loans are not eligible.

    FHA will only work if you take an unsecured loan for the difference. FHA will allow you to wrap a non-purchase 2nd (as long as you didn’t cash-out in the last 12 months) up to 97.15-97.75% of the appraised value. A FHA short refinance would work but you would have to find a participating lender. Most lenders are not participating in this program and congress has already started a motion to cancel it.

    It’s a really tough scenario. I’m not sure there’s much you can do other than focus on negotiating the unsecured debts to imprrove your cash-flow.

  • Chuck

    Hi Keane,

    Thank you for your site and for answering other’s questions. I’ve been trying to do HARP refi with my current lender, Citi, and they keep saying my loan isn’t flagged for HARP. I’ve confirmed with Fannie Mae that they own my loan, and they say I should tell Citi they can do a Refi + or DU Refi +. I’m not getting anywhere with Citi. Do you have a list of lenders that will do HARP refi for Fannie Mae loans?


  • Chuck,

    When did you take out your Fannie Mae loan? The loan must have been sold to Fannie Mae before May of 2009. Could this be the reason you can’t refinance?

  • LPS

    Chuck: I am in the same situation. I have 7 loans with Citi which are Freddie owned. I get the same answer from Citi. I do not know of any lender who is doing HARP (DU Refi plus) on loans that are with other lenders. Moreover, those that are doing HARP are tacking all kinds of fees etc. on the cost structure. Their rate structure is at least 0.5% (50 basis points) higher on the rate.

  • LPS,

    You should expect .50% higher in rate due to the rental occupancy. This is standard for rentals.

    You’re in a tough situation. DU Refi Plus is a Fannie Mae program. Since your loan is Freddie Mac backed, you would be applying for the Same-Servicer HARP program from Freddie or Open-Access. Open-Access is the version any lender can do, but Open-Access has a 4-property-financed limit, so you cannot use it (by the way, that guideline makes absolutely no sense and I wish they would remove it).

    The Freddie Mac Same-Servicer HARP program DOES ALLOW for over 4 properties financed, which means Citi is the only lender who can do this loan for you. This doesn’t apply to Fannie Mae backed loans, as their HARP program doesn’t have a property-financed-limit for the Same-Servicer HARP or DU Refi Plus (the version any lender can do). Only Freddie Mac loans have this hurdle to overcome.

  • Linda

    We’re trying to do a 3-step HARP refi with Wells(original lender). The property value is over 3 times the loan value, the refi would lower our payment by 1/3, my husband and I have an excellent credit rating,Freddie Mac owns the loan.
    We don’t have any wage income, just interest, pension, and IRA income (we’re both 61). How is IRA income treated. I heard from another source that as long as there are sufficient funds in the account to support current distributions for 5 years, the distribution will be treated as income. We far exceed that with our account balance. I believe we will need the IRA income counted in order to qualify.

  • Keane


    You should be okay with your pension.

    The version of HARP that your servicer provides doesn’t calculate debt-to-income, they only verify you have a source of income which your pension will easily account for.

    Wells Fargo is one of the few lenders where you don’t have to talk to Wells Fargo directly to get the same-servicer HARP loan for Freddie Mac. Wells Fargo approved brokers can do this loan too, so it may be worth shopping.

  • Mike


    I have purchased a rental property last year(July 2010) with Wells and it is Freddie Mac owned mortgage. Property value dropped a bit and I have no PMI. Do I qualify for HARP on investment properties?

  • Erin

    If you already did a HARP loan last year are there any other programs that you can do to take advantage of the Today’s lower interest rate?

  • Erin,

    HARP requires that the loan be originated by a certain date. This makes any previously closed HARP loan ineligible.

  • Mary,

    As long as you’re truly paying no fees, that’s not a bad loan. However, I would pay your old mortgage payment so your loan pays off faster rather than lowering the payment. I wouldn’t do a FHA loan. The costs would be too high for that size of a loan.

  • Renee

    Can you help? We tried a HARP a few years ago but the Fees were astronomical (we chickened out) If I rememer right they were going to be approx 15k-20k at our local credit union…is that high or were we just uninformed? We were also uncertain at the time if our jobs were stable and were afraid to commit to more years in the same house…now we have more job stability and know we will be here for another 16+ years to raise the kids.

    We have a first on our house (purchased 2005 for 389K) now at 338k @5.75% (with our credit union)
    a fixed Home equity (same Credit Union)15.9K @ 6.99%
    and home equity line of credit 33k 4% variable (also at the CU) NEVER LATE ON ANY of these payments.

    Our total payments are $3033 monthly (we do NOT have PMI) and would like to lower our interest rate and refi at 15 or 20 years instead of 30 since we CAN afford the payments,just tired of paying sooo much interest.

    I have a credit score of 760 and husbands is approx. 710..do we qualify for a HARP or should we focus on paying the seconds or the first down more before applying?? Help – don’t know what to do and haven’t had time to research what is best for our situation.


  • Renee

    also – i’m fairly certain it is a Freddie Mac/Fannie Mae loan

  • Renee,

    These refinances price like a traditional refinance, so the fees and rate can be adjusted. You can always raise the rate slightly to lower the fees.

    Everything you’ve mentioned says you should be eligible but your home value is still a consideration. What state are you in?

  • Ellen

    About four months ago I started the HARP process through my lender (Chase). I have a first of 220,000 and a second of 250,000. I had to have an appraisal (came in at 390,000)in order to get the second to subordinate (they did). However, in the process of getting the subordination/appraisal (which held up the process), the lender has raised the interest rate from 4.75 to 4.875 and is charging me 2,800 in lock extension charges. They recently ran our credit again and it came in at 708 for me and 718 for my husband. Do you think we can do any better, and,if so, where should we look? Thank you!

  • Sybil

    Hi Keane,

    Thanks for the very helpful information! This was one of the best sites on the topic I found, so I really appreciate the time you put into this. Anyway, I was told today by our current mortgage lender that we can only refinance with them (GMAC) through HARP to avoid PMI. We bought in 5/2006 and have a first of $338k and second at $36k with no PMI. Estimated appraisal is at $300k conservatively, although recent sale comps on a couple websites show $305-315k so that may not be that far off. Closing costs including prepaids and 0.25 point is $4.2k, rolled up into the loan for the primary, gives us a rate of 4.875% (4.927% APR). We also own a second home that has a mortgage of $130k at 6.25% and a value of approximately $160k, which is currently being rented out. Both homes are in the Chicagoland area. Because our LTV is so high, I’m wondering if this is a good rate and if we should just proceed. Those rates are based on our actual credit scores (I haven’t looked recently but mine was 770 last year, my husband’s a bit lower but not by much). Was he right in saying we couldn’t shop around? Is it worth it to shop around given the circumstances we are facing? I already electronically submitted my application, we haven’t yet electronically submitted my husband’s yet. Based on your site, I plan on contacting Citibank about our second home, which is now a rental property. Thanks for all your help!

  • Jason

    Greetings: I’ve frequented this forum before seeking help on HARP refi with LPMI. Thus far, I’m stuck because CHASE won’t allow the HARP rules to apply for me (and all others) with LPMI. Anyone know if the changes Obama is reportedly enacting this week going to open this up for all of us with LMPI?

    Thank you.

  • Ellen,

    There are lenders who will lend on the scenario you have. I would encourage you to at least explore your options including working with someone who has more experience handling HARP loans that have 2nd mortgages. The main problem I see is that your loan was locked too early in the process.

  • Sybil,

    You can shop around. That said, the scenario for your primary residence likely will require you to work with your current lender since few lenders will go over 105%. If your loan is backed by Fannie Mae, it’s worth checking to see if another lender can run your scenario at 105% through Fannie Mae’s engine and get an appraisal waiver. If it approves the waiver, many lenders will be able to do this loan.

    If the 2nd home used as a rental (the loan will consider the property a rental) is backed by Freddie Mac, GMAC will not be able to do this loan. You’ll need to use an outside lender that participates in Freddie Mac’s Open-Access product.

    In summary, if you shop properly, you can check other options. Each scenario is different, so sometimes it’s better to go through your current lender or through an outside lender.

  • New HARP Guidelines coming. I’ve updated this post and created a new post discussing the changes.


    Jason, this may be applicable to you.

  • Ellen


    Thank you for your help! I’m in California.

  • Sybil

    Thanks Keane! I just looked into HARP refinancing our second/rental property with Aim Mortgage. They have a rate/price guarantee. They quoted me 4.75% with no points and roughly $2k in closing costs. They do require an up front $495 appraisal fee. I think I’ve used them before, but I was wondering if you had heard of them. We decided to go with GMAC for our primary since we don’t currently escrow and if we leave them, we would have to escrow anywhere else. Aim quoted us at 4.75% with no points (same as for the rental) for that property as well (closing costs virtually identical) versus the 4.875% with 0.25 points with GMAC. If we did both loans with Aim, they offered $300 off closing costs. Do you think it is wise to continue with GMAC to avoid escrow? We haven’t even called GMAC to see if they will subordinate yet. But my husband doesn’t want to escrow and shell out the extra cash at closing right now. Thanks again!

  • shun

    we do not have a fannie mae loan and it is a conventional loan we owe 189,000 on first loan and46,000 on the second our loan is a adjustable we want to fix it but the loan to vaule is at 200,000 just discharge from chapter 13 american servicing company (asc) service the loan but well fargo would be the bank to refinance, they said we would need to wait 2 years wondering if you had more information for this type of situation. thank u

  • Sybil

    Hi Keane,

    Sorry for all the questions. You can disregard my earlier post. We decided to go with GMAC to avoid escrow and higher out of pocket costs. Unfortunately, our second home is with Freddie Mac and I found out they won’t refinance because it is tenant occupied. We never intended it to be a rental and it is currently under a short term lease as a furnished rental with all our linens, towels, dishes, furniture, everything in there still. Can we still refinance through HARP with the new guidelines released yesterday? We never knew who owned our loans until today and I didn’t know of this “tenancy” change issue with Freddie loans. I have to imagine many people are renting out second homes so this requirement is totally asinine. Can we refinance with another lender when our tenant leaves or does Freddie require you to use your existing lender? Thanks again for your help.

  • Shun,

    Did you also check to see if your loan is backed by Freddie Mac?

    Before we dive into bankruptcy seasoning, we need to make sure you have a HARP eligible loan.

  • Hi,

    We have a current VA loan at 5.5 % 30yr fixed. My wife and I are current on our mortgage payments and have not had a late payment in the 6 years we’ve owned the home. We have had the same employers during this time. Are their options for us? We have started to incur credit card debit and would like to use a refi to drop the interest rate so we can add cash flow to help pay these down faster. Any ideas?

  • shun

    To keane,
    yes and it is not back by freddie mae. so I’m trying to see what else can be done about the mortgage, we really need a fix rate. if you have any suggestion let me know. thank you

  • Keane


    You shouldn’t need a HARP loan. VA loans have a special refinance program that doesn’t require an appraisal called a VA Interest Rate Reduction Refinance Loan (IRRRL). They allow you to refinance to a new VA loan with no appraisal and a .5% VA funding fee.

  • Keane


    With a bankruptcy, a traditional refinance would require a few years before you can refinance. Although the success rate is low, your only chance to get your rate fixed now is to request a modification.

  • shun,


    I like your suggestion but we aren’t behind in our mortgage payments, and I have heard that you need to be behind on the mortgage to be considered for modification loan. So it looks like we are stuck with this adjustable loan.


  • Shun,

    Approved modifications are rare and modifications approved without being late are even more rare. I do know people who have had them approved under these circumstances however, so it’s worth a shot.

  • bruce

    We bought our home in 2008. Our primary mortgage and one home equity line equal and LTV of 101%. We have an FHA arm and its not owned by Fannie Mae or Freddie Mac. I am a veteran and have my VA certifications.
    We tried to refinance with another bank recently and were denied. We have never missed a payment.

    Are there are any options for us?

  • Joe

    I spoke with a mortgage broker and learned that if I using the HARP I will have to pay a higher interest rate. I am currently paying 6.25 percent and he said that the best rate he can get me is 5 percent. He said I have perfect credit and my debt/income is great but because my CLTV is 102% I can’t get a better rate. Does anyone know if this is true???
    If so how is this plan going to help anyone?

  • LISA


    First, Thank you for the abundance of information provided! It has been very helpful. We have a Centex->Chase->Seterus mortgage that we would love to refi under the HARP program. We have tried in past to refi with Quicken but were not able due to LPMI incorporated into our original loan. When I contact Seterus, they do not refi but can refer me to Quicken again. According to Seterus, our loan is owned by Fannie Mae, no longer Chase/Centex and we have no PMI so this should be helpful? Under the new guidelines, will the refi be possible? Should I start the process? Our rate is 6.875%, we owe $213,000, and initial market analysis comp is around $210,000. A referral would be appreciated. Thanks for your time and knowledge!

  • LPS

    Lisa: I have been looking into HARP refi for several of my FNMA loans. So far, this is my info:

    1. Though FNMA allows no doc HARP refi by any direct FNMA lender (regardless of who services the loan now), not many are doing it.

    2. GMAC (Ally) will do only full doc refi.
    3. CHASE will do no-doc HARP refi but only those that they service, not any one else’s.
    4. FHMC has a similar program as FNMA on the books but not many lenders are doing it.
    5. The problem as I see is that though FNMA & Freddie are allowing HARP refi, they are not mandating the lenders to do it.
    6. I have not found any lender yet who will do no-doc HARP which is being serviced by another lender.

    6. From recent reports, it is FHMA (the Receiver for FNMA & Freddie) is the road block in permitting no-doc refis. As long as they are collecting a higher rate from you and I, they don’t care.
    These are the impediments as I see them.


  • Keane


    I’ve never heard of a HARP program that is a no-doc program for outside servicers. Where is your resources for this?

  • Mike

    Hi Keane,

    I’d like to know HARP participation is State specific. Basically, by servicing company (Green Tree Servicing) is telling me that they are not licensed to provide HARP assistance in Virginia, but they cannot provide any documentation or reference to this fact. I’ve looked myself online, but have not been able to find an answer. Thanks for your help in advance.


  • Keane


    HARP is still considered a new home loan that fits under federal and state licensing and compliance requirements. Hearing that a company does not participate due to licensing sounds very possible.

  • Ghezal

    Hi Keane,
    I am trying to refinance my loan through HARP and the only mortgage company willing to do it is Quicken, are there any other banks participating?

  • Linda

    Hi Keane,

    Just wanted to let you know that we successfully completed our HARP refinance with Wells Fargo. Everything was as advertised: no points, fees, title, or appraisal, just the county recording fees. Loan is a 30-year fixed at 4%.

    Thanks for the great site!

  • Dan

    Any updates on an accurate HARP 2.0 timeline

    I know technically all applicants starting now get the extra fees dropped.

    And I know that the 125% limit doesn’t go away until February/March.

    But I also have talked to people in the industry that say the government hasn’t officially sent out all the info/guidelines needed yet.

    Anyone know of any places at least advertising it yet or any “insider” info on when anything may actually be available?

  • Ghezal,

    There are many lenders who are doing HARP loans other than your servicer. Let me know your scenario and I’d be happy to send you a few recommendations. They are definitely scenario driven.

  • Linda,

    That’s great news!


    The changes for HARP 2.0 are coming out in steps, starting with a few changes yesterday. You can read more about the specific changes here:

  • Ghezal

    Hi Keane,
    Thanks for responding. We bought a house in Seattle in June of 2007 for $410,000. We have a 1st mortgage through Stanford Federal Credit Union for the amount of 324,000 at 6.5%, this is through Fannie Mae now. We have a second mortgage through GMAC for 81,000 at 10.5%. We’d like to refinance the first loan at a lower interest rate, the house is now worth 344,000. The only lender I was able to find was Quicken Loans at 5.2% and 7600 closing costs, I think that’s a rip off. Can you please suggest some lenders that would give us a better deal? By the way, we live in California now and own a home, the house in Seattle is a rental. Thanks for all the help.

  • Keane


    I’ll email you directly.

  • Jeanne

    Hi Keane,

    I contacted Citimortgage, my current lender, and inquired about the HARP loans and am uncertain that the information provided to me is accurate. Please advise.

    I have a Fannie Mae loan, 6.875% Fixed Conventional, 20 years remaining, LTV 55%, never any late payments. I am self employed (17 years), file as a sole proprietor, credit score 760.

    My problem with a conventional refi is that my DTI is off kilter, due to ammortization, depreciation, and also revenue has been lower due to the lagging economy.

    Citi told me that their prequalification steps said that I am not eligible, but to apply anyway because he thought I would be. He said I should apply under the “old” Harp, rather than the new 2.0. and gave me the following information for old Harp: 15 year loan at 3.875, APR 3.9, no doc-no income verification, appraisal mandatory, lender fees $1030.50, title fees $500-$1800. He said that if I could find out who my old title company was, the title fees would more likely be $500.

    When I asked why I should apply for the old Harp, opposed to the Harp 2.0, the only thing he said was that there were no fees (advantage), and was a streamlined loan, but the disadvantage for my case was that it was a stated income, so he felt the no doc (old Harp) would be better.

    He also said that because of a small remodel project ( I am replacing the carpeting on the 2nd floor, but need to wait until the painting is complete), I should wait to apply for the old Harp until that is completed. He said the appraisal wouldn’t go through without the carpet.

    Any thoughts on this?


  • Jeanne,

    The information you shared doesn’t sound right. Fannie Mae does not require debt-to-income to be calculated on the Refi Plus program. The new guidelines released are not a new, different program, they are an adjustment to existing guidelines. Fannie Mae only requires your debt-to-income to be calculated if your payment is increasing 20% or more above your current payment.

    There’s a version of HARP that any Fannie lender can do that requires debt-to-income to be calculated. Perhaps Citi is only participating in this program (DU Refi Plus). Even if this were the case, depreciation and amortization is typically not counted against you as a business owner can those expenses can be manually removed in your income calculation.

    If CIti doesn’t participate in the same-servicer Refi Plus program, you should shop your loan and find a loan officer who understands how to calculate debt-to-income for a business owner.

  • Jeanne


    Thanks for your info! As far as the information that Citi gave me regarding the same-servicer Refi Plus, I would be refinancing from a 30 year to a 15 year, and reducing my payment by $50 per month. They said that my DTI wouldn’t be calculated.

    Is it mandatory to have an appraisal? My mortgage balance is 153k, and my assessed value reflected on my tax bill is 255k. I have done $25k worth of improvements since my last assessment, as well. I don’t have a problem with equity regarding an appraisal, but am just wondering if it is necessary to spend the $500 on an appraisal when I clearly have enough equity? Nor do I want to rush through my newer paint, woodwork, carpet project just to get the refi to go through.

    Also, can I negotiate the title fees lower?


  • Jeanne,

    On the same-servicer Refi Plus, its not common to for an appraisal to be required at that loan-to-value but some loans require it and Citi may require it, so you may not be able to choose.

    Title/escrow services are a service you can shop for. If Citi is fine using a different company, you can shop for these services to find cheaper rates. The lender does not profit from these services but they may only choose to work with certain companies.

  • John


    Thank you for the information, it has been helpful. I contacted my current lender WF to see if I could get refinanced through HARP. They offered 4.25% with about $3200 in closing costs including a required appraisal. They also said that rate is valid up to 125% LTV. Based on recent sales in my area I’d say it will be pretty close to that. Fingers Crossed!


  • Daniel

    What if you aren’t underwater, have good credit and have plenty of equity, but plan to refi in order lower rates/terms? Is Harp a valid option to explore? In other words, I can easily get refinanced without Harp–but is there any benefit in terms of points paid or other factors?

  • Daniel,

    If you qualify for a conventional refinance without HARP, there’s not much of a benefit other than reduced documentation in some scenarios and possibly an appraisal waiver. I would talk to a lender who can provide both, find out how much less paperwork you’ll need, difference in pricing and if you qualify for an appraisal waiver so you can compare the two.

  • George

    I need some advice from you. My first mortgage is Fannie Mae $21k owned by BOFA $780 @ month, my second HELOC OWNED BY CITI IS 124K BALLOON IN 36 MONTHS $373 @ month interest only. House value is $120k. My credit score is destroyed with my two investment houses in short sale, credit score range from 250 to 800 and showing 500 and going lower. I do have $21k in saving account. We do have steady income of $71k. I was thinking pay off the first with my savings then apply the payment from first which is $780 to the principal of the heloc. In three years i will be owing $87k value of the house will be about $125. Then I can refinance since i will repair my credit score trough three years of paying an have equity of about $38k. Any recommendation? Thank You George

  • George,

    I think you plan is sound.

    At 2 years separated from your short sale, you should be eligible to refinance on a conventional loan as long as you have qualifying credit. It’s risky since your HELOC can rise, but a plan to pay down the balance should help your equity while you build your credit.

    Here’s a post on how to build your credit to qualify for a loan. Follow these steps as you follow your plan you listed.

  • DJ

    Hello Keane:

    My rate is 6.125% & was offered 5.125 (HARP)from Citi but feel they can do better. My property is upside down & I do have PMI. I can pay it off if needed ($13,000). My LTV would be near 125% because I owe $393,980 with approximate appraise value $320,000. My credit score mid is 720. My friend went to a NACA seminar two weeks ago in Ontario, California & walk out with a 2%/40 year loan. Her credit score is no where near mind. I was hoping to be in at least 3% or 4% range. Is this possible considering info I provided you or is 5.125% about where I should be due to LTV? If you suggest I can do better I plan to attend NACA seminar in two weeks here in LA.


  • DJ,

    The rate is high for today’s marketplace where the rates should be no higher than mid-upper 4%’s regardless of price hits. However, they do have you in a tough spot since your Loan-to-value is high and you have PMI.

    I wouldn’t pay attention to the 2%/40 year quote your friend talked about. That is for a modification which can only be done if you have a hardship. Further, the failure rate of modifications is high, where HARP refinances are a regular refinance. Done correctly, it will go through with no issues.

  • Linda Lin

    Hi, Keane. We find your website very helpful, and would appreciate some further guidance on our situation to see if we would qualify for HARP.

    We have four mortgages with the same servicer (PNC) covering: (i) primary residence; (ii) secondary residence in Florida; and (iii) two rental properties — one in Florida and one in Wisconsin.

    The 2006 mortgage for our Florida rental property is the problem, as it has an LTV of 200%. This mortgage is a 30-year fixed at 6.5%, and is owned by Freddie Mac. Its original occupancy has changed from second home to rental (mortgage has a Second Home Rider).

    Is our only refinance option under the Open-Access Freddie Mac HARP program?

    Could we refinance two mortgages at the same time under HARP? We tried the traditional way with PNC with no success.

    The second mortgage we are interested in refinancing is for our secondary residence in Florida. This is a 2005 fixed 30-year mortgage at 5.875%, with an LTV of about 100%. It is not owned by Freddie Mac, however.

    Our remaining two mortgages, which also are not held by Freddie Mac, are a 2004 15yr fixed mortgage at 4.875% for our primary residence w/an LTV of 20%; and a 2004 30yr fixed mortgage at 5.625% for our WI rental w/an LTV of 50%.

    Any guidance you could give us would be greatly appreciated.


  • Linda,

    When did you last call your servicer? Freddie Mac updated their guidelines and PNC may be able to help you now.

    I would also check to see if your loans are backed by Fannie Mae. It must be backed by one of the two agencies to be HARP eligible.

  • Neil


    First of all, thank you for this great website. IMO, it has more useful information than the government sponsored websites out there. I’ve contacted the (888) number listed in the makinghomeaffordable.gov website but they are less than helpful, to say the least.
    Like many other postings here, I need your advice. My wife and I are trying to refinance our mortgage loan under the HARP program. We took out our 5.25% 30-yr fixed loan on March 2009 but, recently, we found out from Fannie Mae directly (as Chase was not disclosing this information to us for some reason or another) that it was not securitized until June 1, 2009 – one day too late of the HARP cutoff! Our house is currently valued about $480K (at the lowest range) and our balance is about $430K. We are current and have never missed a payment. Our credit scores are also decent (760+). I want to know what alternatives we have in securing a shorter term (15~20 years) loan and taking advantage of the historically low interest rates. We are not very satisfied with Chase and would like avoid them if possible.
    I apologize for not reading through the other postings first; you may have addressed a similar issue earlier.
    Thank you, any reply will be greatly appreciated.

    Neil (Clifton, VA)

  • Neil,

    I’m sorry to hear about your securitization date. That is horrible!

    This is general info for conventional financing as I’m not a licensed loan officer in your state. Any suggestions below is general loan information and you should consult with a loan officer licensed in your state for accuracy and eligibility.

    If you are capable of doing a principal reduction and pay your loan to $417k, you will have more than 10% equity. I would look for a lender who offers upfront PMI premiums, which instead of monthly PMI, only increases your closing costs an upfront fee. If you do this on a 15-year loan showing 10% equity or more, the cost of this fee is usually around .5%. A small cost to get a 15-year loan without monthly PMI. I would learn more about single premiums and see if this is a good option for you. Let me know if you want me to refer someone who’s licensed in your state.

  • Paul

    Hello Keane, Great web site…

    I have a Chase/Freddie fixed 1st at 6.75% with $285K balance. Also have a 2nd/3rd HELOC totaling $450K. The property values about $575K. Was turned down by Chase once for HARP 1.0. Now want to try HARP again. I’m self employed with excellent credit (740+), but don’t have enough income to qualify for regular refi. Chase quoted me 4.5% fixed with about $3500 closing cost. Seems high comparing to what I have heard. What’s my best options? Are there other lenders that offer no income qualifying loans?

    I also have a owner turned rental single family with Chase/Fannie 1st with $180K 1st and $55K HELOC. Property values about $230K. What’s my options there?

    Thanks Paul

  • Paul,

    Chase will not do an income verification when doing HARP but outside lenders will require it.

    FYI, I wouldn’t decide so quickly if you are not eligible for a loan due to being self-employed. There’s a very specific way that we underwrite loans for business owners that may remove debts and expenses from your income to debt calculation. If you haven’t spoken to someone who specializes in self-employed income loans, I would explore this.

    What states are your properties in?

  • Paul

    Hi Keane, MY properties are in SoCal. I had my tax returns looked at by a loan underwriter friend of mine. She came up with income that Chase gave me credit for, not counting non cash expenses etc. So looks like I’m stuck with Chase. Is 4.5% with about $3500 closing costs sound about right from your end? How about the owner turned rental property? Thanks for your help.

  • Paul,

    I don’t know all the other details but that sounds like a good loan for a rental property.

  • Jeanne

    Hi Keane,

    I had inquired with Citi back in December about a HARP refi. I was told that I pre-qualified but that I would have to have an appraisal, regardless of having a LTV of 55%. They said that my appraisal/refi would be rejected because I was painting and reflooring the upstairs. So, I completed the work recently and called Citi back. I have been told that I cant refi under the old HARP or the new HARP because with both you need to have an LTV over 80%. This obviously was not what they had told me in December.

    I contacted Fannie Mae and asked about refinancing a 55% LTV home under the old HARP and the new HARP. He said that they would not refi under the new HARP, but the old HARP I could. He said that they just don’t want any more old HARP applications because they want everything processed under the new HARP. By ‘they’, I am not sure if he was referring to Citi, or themselves (Fannie).

    In the meantime, Citi left me a message saying that they were sending me an application. When I called back, I discovered that they were sending me an application for loan mod. I asked why because I am not behind on my mortgage. I clarified that my February inquiries had been regarding a refi, not a loan mod. They said that since I was turned down for HARP, they transferred my file to loan modification to attempt a refi through HAMP. I asked how I could be turned down for HARP, when I was never allowed to apply?? They have since continually pressured me to quit paying my mortgage so that I would qualify for HAMP. I will never quit paying my mortgage (and ruin my credit!) to get a lower interest rate…

    I am confused by this. Also, I have 2 friends that have applied for the old HARP (one applied last month, the other last week) and each of their homes are around 70% LTV. It is obvious that Citi is giving me the run around. I am getting my information together and filing a formal complaint with OCC.

    So my questions are this:

    If my LTV is less than 80%, can I refi under the old HARP? What about the new HARP?

    Can you refi under the old HARP after the new HARP release (I think the date was March 15th or 17th)? Can you choose between the two, or will they only process the new HARP after that date?

    Thanks in advance!

  • Jeanne,

    To a lender, HARP 2.0 is not a whole new program. It’s simply a modified version of the old one. Once the old one is gone, only the new one is left. You can’t apply for one and then the other.

    There’s some adjustments regarding HARP and lower loan-to-values but nothing changes an outside lender from CHOOSING your estimated value, meaning they could choose a value much less than your estimated value (getting the value over 80%). If the underwriting engine for Fannie Mae accepts the value with an appraisal waiver, no appraisal is needed. If you go through Citi, they’ll use another method.

    Do you have to use your current servicer?

  • Jeanne

    I need to use the same servicer. I am hoping that DU will kick back that I can do the Refi Plus (manual underwriting) and I won’t have to go through all the steps of redoing the entire loan, paying an appraisal, etc. I am not behind or upside down, credit score is mid 750, LTV 55%, excellent payment history with CIti, but I can’t do conventional because my dti is 45% – 50% range (and always has been).

    I just heard back from Citi and they said that all the confusion over eligibility is due to the fact that I took out an Alt A loan (specifically a stated income) 10 years ago, and Citi wasn’t the originating lender. Not sure what this means as far as them working with me. If they won’t, do you have any suggestions?


  • Jeanne

    Sorry for the second post, Keane. Citi just called me again and they said that if they filed an application under the old Harp, an appraisal and income verification would be necessary, and I am concerned that the 45% – 50% DTI. He said that the fees were $3050 to close (including 1/4 point). When I was surprised at the closing costs, he said that it was typical.

    We discussed Harp 2.0, and he said that there was no income verification or appraisal necessary, so I figured it would make more sense to wait until after March 23, when he said that they would be able to process Harp 2.0. The representative said that he wasn’t certain that my loan would process under Harp 2.0 due to the fact that I am not under water on my mortgage. There was a lot of pressure to apply RIGHT NOW, under the old Harp. Is it mandatory to be upside down for Harp 2.0?

    Thank You for your help!!!

  • Jeanne,

    You don’t need to be upside down.

    The income verification was NEVER needed for HARP under the current or new program unless your payment is going up. This is for the program you get from your servicer.

    It is a regular refinance, so fees are typical. On the HARP loans that do calculate DTI, they do allow the ratios to be higher than regular loans.

    I don’t understand the logic of his advice. You shouldn’t have needed an income check now or later. The changes coming later this month do not seem to benefit your scenario.

  • Barbara

    I am retired and net $3500/mo. House payment with taxes is $1700. I owe $251K on home and a similar home is on market for $245K so I am underwater. Have Freddie Mac loan @5.5%. Owe $10K in debt. Have not missed any payments for anything and FICO is excellent. I have no savings and want to know if I would qualify for HAMP or HARP or what are some options to stay in my home.

  • Linda

    Hi Barbara,
    You should be able to qualify under HARP. There is no standard loan-to-income requirements, just a determination that you will be able to repay the loan. Since you are paying a higher rate mortgage, that should not be a problem. My husband and I refinanced our Freddie Mac loan last year under the old HARP program. Our income and loan amount was similar to yours, although we were not underwater on the loan to home value. Under the new HARP you can refinance an underwater mortgage. Our refinance was with Wells Fargo, and our new mortgage is a 30 year fixed at 4%, no points or fees for the refinance. I believe that rates have inched down just a bit since we did our refi.

    They do not like to count IRAs in the income calculation, just regular payments like pensions. I showed them an amortized distribution schedule to get them to include our IRA as income.

  • Barbara,

    What Linda is telling you is partially true. There’s a version of HARP that your current lender/servicer can offer that does not calculate debt-to-income. Keep in mind that the pricing is often higher when you go back to your servicer, so be sure to check with an outside lender for pricing and eligibility before you commit. If you can only qualify under the program your servicer can offer you, then go that route.

    Thank you for sharing your scenario Linda!

  • Barbara

    Thank you Keane and Linda for the information.

  • Jenny

    Well–I feel stuck and lost at the same time. I bought a house with my mom at the end of January. My current house that I have been living in for the past 13 years was going to become a rental. I have an 5.35 ARM. The seller of my new house “rented” the house back from me and destroyed it. My agent helped me with the rental agreement and neglected to get any security deposit. Sadly, all my money has gone into fixing the new house so I can move. My current home would need to rent for about 1600. Sadly, I am now being told I can most likely get 1400. I have a small amount of money to try and fix it up–but I need to somehow get a better monthly payment. I am so overwhelmed. My loan is with BoA. Would HARP be my best option? If yes, how do I shop for a lender? thanks!

  • Jenny,

    I’m sorry to hear that.

    To try and get a better rate, I would try to apply with another lender. If your loan is backed by Fannie Mae, they’ll often give appraisal waivers. If the house is currently rented, you may be able to use the rental income to qualify if its on your 2011 returns.

    If all else fails, apply with BOA. Email me if you want a contact there.

  • Jenny

    Keane~ I am still in the original house–so there is no rental income. =( Thank you so much for your input!

  • Jenny,

    You should still refinance it as a non-owner if it will help you get a lower payment and make the property a better rental. Do you know if you qualify? Email me if you want me to send you a referral.

  • Tina

    Hi quick question with Harp Loan refinance. Can have late payment on you record

  • Tina,

    It depends on how recent the late payment was and which version of HARP you’re applying for. If you’re working with your current lender, you only need to be 6 months separated from the last late payment.

  • andreia

    Please explaim me reagarding the refinance for investmen property.
    I own a single family investment , underwater, no behind on my mortgage and my credit score is great.

  • LPS

    Keane, I have corresponded with you through your website before. I have 33 Fannie Mae Loans presently serviced by Chase. Chase is doing ‘streamlined’ (no DTI, no appraisal, no income verification, no tax returns) HARP refi on all. I have already closed on 10, another 10 in the pipeline, and am waiting to release remaining 13 shortly.

    I have another 16 Fannie/Freddie loans serviced by Citi, SunTrust, GMAC, Nations Mortgage. They are being ‘prudish’ and they are not doing ‘streamlined’ refi. They would do HARP but would need to fully qualify the borrower. If so, I wonder why they even call these as HARP refi. But is is what it is.

    I also understand there is a bill in the Congress called ‘MyRefi’, which is loosely being referred as HARP 3. If this goes thru’, and depending on which elements of the bill get thru’ and which elements of the bill fall by the wayside, it would be a catch all for all remaining mortgages: Non-Fannie/Freddie loans, loans greater than the conforming limits, and even the so called ‘limited doc’ loans that were done in the yester-years. It would be limited to refi’s only and that too only if the subject loan was still current.

    So, HELP is on the way; hope the ambulance gets to the patient before the patient breathes his/her last and throws in the towel.

  • LPS,

    There’s two versions of HARP for each agency (Fannie/Freddie). Only the servicer can do the streamlined version, which is called Refi Plus for Fannie Mae loans. DU Refi Plus is made for the other lenders and they all require credit/income analysis.

    I wouldn’t work with outside lenders who do not have a deep understanding on how to evaluate rental property income since you have so many properties.

  • Andreia,

    If the loan is backed by Fannie Mae or Freddie Mac, you have a chance of refinancing it. This blog post has the links to check. It’s good that you’re not behind and have good credit.

  • nicole

    I just went to refinance and qualified everywhere, except my appraisal. My loan is $520,000 and my appraisal came back at $590,000. My loan is backed by freddie mac. All we want is a lower interest rate. Do I qualify for harp? Please help.

  • Nicole,

    Perhaps. The value you address is no issue. However, your loan must be securitized by Freddie Mac before May 31st, 2009 to be eligible. I’ll email you the link to find out.

  • Julie

    I was just denied a refi by HSBC. My loan is fannie mae backed, no pmi. This is an investment property in Florida, which I purchased for 163K and is only worth 70K. I have 4 other condos with mortgages. My credit score is good but my debt to income ratio is 66%. I was denied to to my debt to income ratio. HSBC blamed it on Fannie Mae, saying that I needed to show more income; however I have used the HARP with Wells Fargo and Bank of America with no problem.
    Can I do anything, ask for a review of it? Thank YOU!!!

  • Julie,

    Is your loan with HSBC? If they’re doing the DU Refi Plus HARP program, this version is available to all lenders and DTI is calculated. If they’re doing the Refi Plus program (No DU in the name), no DTI is calculated. The Refi Plus program is exclusive to the company you’re making your payments to.

  • Bob

    Hello Keane,

    Currently in a 30 year jumbo, 1st @ 6.5% 2nd @ 8.125%. At ~8% Equity. Not backed by fannie/freddie.

    Only current REFI option is a 30yr FHA refi… Getting quoted 3.25% w/ with lender credit for closing. Even with MIP, monthly payment drops ~15%

    Question is – *IF* Harp 3 were to pass sometime next year, AND rates were within 1% that they were now, if I were to REFI into the FHA I listed above, would I be disqualified for getting a Harp 3 loan? Any other drawback to getting FHA REFI other than minimum 5-year MIP?

    I know alo of “ifs” in the question… but any general advice would be much appreciated

  • Bob,

    You seem to be on top of the facts.

    I can’t say if it would disqualify you from HARP but historically, people who waited benefited from waiting. When people with 6% FHA loans did a streamline to 4.5% with higher MIP, they disqualified themselves from the newer/lower MIP options released earlier this year for mid-2009 FHA loans or older. This could happen to you.

    However, I also have not seen any viable options for non-agency and government loans. If I were in your shoes, I would track rates closely. If rates start to increase, I would do the FHA loan but if they stayed the same, I would wait.

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