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Why am I getting declined for a Harp 2.0 refinance through Freddie Mac's automated underwriting system.

I have tried with several brokers and several lenders to refinance my home through the Harp 2.0 program but I'm being told that the Automated Underwriting System for Freddie Mac isn't approving my application. My dti is about 50% and my ltv is about 140%. I have offered to pay off my credit card debit but when they re-run my application with no debt other than my mortgage its still coming back as decline. I have called Freddie Mac directly and was told that there is no reason that they see as to why I'm being declined. by diesel from Maple Valley, Washington. May 17th 2012 Reply


Rob Pucci (robertpucci)
#19 ranked lender in Oregon - 28 contributions

I have found that the Freddie Mac system is very fickle. It can take a tweak here and a tweak there to make it work. I would guess that the right tweak has not been found. What is you credit profile like? That may play into it. Are they getting a straight up decline or a lower level approval? Some lenders will not use the lower approval levels, called Expanded Approvals.. My processor has had a magic touch in helping us get some rough Freddie files approved. Perhaps we can find the one key to solving the problem. We also have a very hands on rep for one of the lenders who accepts the Expanded approvals, and we can get her involved as well. If you want to give me a call tomorrow, that would be great. Rob Pucci 971-832-9108, or robertpucci@greatnwloans.com. Thanks!

May 17th 2012
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Gary W Smith (garywsmith)
#1 ranked lender in Washington - 104 contributions

Many lenders have started to add additional layers of risk and limitations to their DU systems. Freddie is hard to work with but not impossible. It does not sound that DTI is a factor. My first guess is that the lender(s) have added a limitation of 125% to their findings. I would be happy to work this up for you. My name is Gary W Smith, MLO#53963, with First Priority Financial. I am here locally and would be happy to discuss this with you. Please call my office at (253) 536-5626 and lets get you a lender that is not adding risk layering to their DU findings.

May 17th 2012
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William J Acres (William_Acres)
#1 ranked lender in Arizona - 4,585 contributions

Both Fannie and Freddie can be fickle... having an experienced lender / processor can be very beneficial. Also, keep in mind that there has been some improvements to both Fannie and Freddie Automated Systems and they are now approving what was getting turned down 3 to 4 weeks ago.. I'm not sure when the last time you had your broker check, but if it's been more than 4 weeks ago, I would have them re run it... I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. 480-287-5714 WilliamAcres.com

May 17th 2012
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Does the Freddie Mac automated underwriting system approval vary with each lender. If it does are there any lenders that will refinance a loan like mine at the lowest interest rates available?

May 17th 2012
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Chad Scott (ChadScott)
#16 ranked lender in Washington - 8 contributions

I agree with Rob that Freddie Mac can be quite fickle. Did you actually pay off the debts or did your mortgage broker just exclude them? I have found that if your balance to limit ratios are high, even if they are excluded, Freddie Mac will still issue a decline or expanded approval. This is because although the monthly payments are excluded, reducing your debt to income ratio, the overall credit profile is not changed. A very important factor in automated underwriting is a term called "utilization of credit" which takes into account how you are using credit. I am a local mortgage broker here in Snohomish county and would be happy to help you workout the issues and get you approved. Chad Scott - 425.750.6315, or chad@tmms.com.

May 17th 2012
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Bradley Manhoff (BradManhoff)
#8 ranked lender in Arizona - 5 contributions

The simple answer is the lenders appear not to trust Fannie Mae. The overlays mentioned in other comments were tightened almost daily. Tightening overlays helps improve the quality of loans a leder originates. Should Fannie change the rules a lender is less likely to have unsaleable loans. I hope that helped. Like you I am disappointed in the hype over HARP!

May 17th 2012
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 2,343 contributions

It is simple. In my experience, Freddie Mac appears to be denying anyone over 45% debt-to-income ratio.

May 18th 2012
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Linda Wintersteen (Linda123)
#4 ranked lender in Arizona - 884 contributions

i just some go someone thru with freddie , that could not get done anywhere else what is your loan size ?? i can do the harp in your state.. I am a private money lender, and I do not have all of the over lays .. email me at yourloanpartnerforlife@live.com or call me at 602-330-1598 i also got a approval for a fannie mae that was over 48% dti.. same rate that they were offerd by their lender

May 18th 2012
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