HARP 2 . 0: Banks Flooded With Applications
When the new Harp 2 upside down refinance program (affectionately referred to as HARP 2.0) hit the streets about a month ago, it brought the mortgage industry to a complete halt. See, our good friends Fannie and Freddie, whom own a majority of the loans on the market right now, didn’t release all of the updated guidelines until the last minute. Since banks have to wait on these guidelines to create their own, everything was a mystery on the program ‘opening day’. This, combined with the huge number of applications being received, has lead to a major slowdown in the processing and underwriting of these new refinance loans. This great mortgage refinance program, for those of you not yet in the know, allows homeowners with a Fannie Mae or Freddie Mac owned mortgage (originated prior to May 2009) to refinance into today’s lower rates regardless of how upside-down you are! How do you know if your loan is owned by Fannie or Freddie? How can you find out if YOU qualify?
Click HERE to see if you qualify today! How long is it taking to close on one of these new Florida refinance loans? Some banks are quoting upwards of 120-180 days, 4 to 6 months! Luckily, we are looking at more of a 60-day turnaround time here which is still entirely too long in my opinion (at least compared to our lightning fast purchase closings). So, please prepare yourself for the long turn times and realize how lucky we all are that such a unique and beneficial program even exists. It truly is ‘worth the wait’. I, for one, am ecstatic that they finally release a loan program designed to reward those that continued to make their payments on their underwater homes. Now that you know what you’ll be facing when refinancing let us help you with a few tips to expedite the processing and underwriting of your loan:
- BE ORGANIZED! Sending in the wrong documents or sending everything in one by one can cause huge delays in your processing times. The easier you make it for the bank to sort through your documents, the faster they will respond.
- BE PREPARED! Most banks will be looking for W2s, pay stubs, tax returns, mortgage statements, insurance docs, bank statements and a copy of your current mortgage note. Gather these things up front and save the hassle of running around when asked for them.
- BE INFORMED! Know how the HARP 2 works and understand that this is a two step approval process. The file first has to be approved through the automated underwriting system (AUS) and then manually reviewed by an underwriter. Find out from your mortgage professional if and when they will run your application through the system initially. This will tell you if you will most likely be approved or not and help you uncover some areas that would need improvement before submitting to the bank.
- BE PATIENT! Choose a mortgage professional you trust and allow them to do their job effectively. Everyone is subject to the long wait times due to the popularity of HARP 2 . It, in no way, shape or form, is a reflection of the quality of your application.