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Jeremy Redlinger

Home Affordable Refinance Program 2 (HARP 2) - March 2012 Enhancements

Tuesday, March 6, 2012 - Article by: Jeremy Redlinger - Movement Mortgage - Message

The much anticipated Home Affordable Refinance Program 2 (HARP 2) is expected to be in full swing sometime in the middle of March 2012 making it much easier for underwater home owner to refinance their mortgage into current market mortgage rates. The two biggest guideline changes to the HARP 2 program include an unlimited Loan to Value and the ability to refinance even if you have Private Mortgage Insurance (PMI), which opens up financing opportunities for seriously upside home owners who have kept up with their current mortgage obligations.

As of March 5th 2012, as a mortgage broker I have seen some lenders make some changes to their guidelines to help borrowers refinance under the HARP 2 program. These changes include the reduction in loan level price adjustments associated with obtaining a mortgage rate at current market levels and some lenders have removed their 105 percent Loan to Value restriction and increased them to 125 percent. The 125 percent Loan to Value is not officially a HARP 2 guideline as the program is designed for an unlimited Loan to Value ratio and that change is expected to come in the middle of March.

The biggest obstacle that stood in the way of underwater home owners during the original HARP included the inability to refinance if your loan carried Private Mortgage Insurance. Guidelines in the HARP 2 program require Private Mortgage Insurance Companies to waive their rights to force lenders to purchase back badly underwritten loans in order to participate in the HARP 2 program. To the best of my knowledge, United Guarantee was the last Mortgage Insurance Company to sign on to the program and have since developed a new underwriting system for PMI coverage dubbed the "CoverEdge" which has already been approved by Fannie Mae.

If you do have PMI and plan to refinance under the HARP 2 program, consider your financial goals and objectives you want to meet over the next 5 to 10 years. Refinancing under the HARP 2 on a 30 year fixed program is the best way to lower your overall monthly mortgage payments but will cost you more in interest over the life of the loan when compared to a 20 year or 15 year fixed rate mortgage. Additionally, on a shorter term loan your mortgage balance will decrease faster which will also allow for the cancellation of PMI sooner resulting in even more in monthly savings.

Additional basic requirements for the Home Affordable Refinance Program 2 include that the home is a Fannie Mea or Freddie Mac owned mortgage on or before May 31st, 2009, a 80 percent or greater Loan to Value in which the home owner has not missed a payment in the previous 6 month and only 1 late in the past 12 months. You also must not have refinanced under the original HARP program unless Fannie Mae owned the refinance HARP loan originated between March to May 2009.

For more information and continued updates about the HARP 2 mortgage refinance program visit

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