40 responses

  1. Petunia 100
    February 14, 2012

    Well, Harp 2 loans are not at market rates, they are at a premium. I can get 4.6375. I'm at 5.25 now, so this is not an attractive deal for me. I am not moving forward.

    • YFS
      February 14, 2012

      Wow.. that really is unfortunately. So, was it any advantage to possible go through with the loan or was it a complete waste of time?

  2. Petunia 100
    February 2, 2012

    I am in the process of doing a Harp 2 refi. :)

    I am at approximately 150% LTV, after putting down 20% + closing costs + made numerous repairs out of pocket before moving in (my house was a bank-owned foreclosure). But it's not as bad as it might have been. I'm so glad I didn't buy at the peak. Home prices in my area have fallen 70% from the peak. Can you imagine buying a home and a few years later being at 300% LTV? Not pretty.

    After the refi, my new lower payment will make it possible for me to rent my house out for the payment should I need to move. That is a relief, because selling is certainly out of the question.

    • YFS
      February 2, 2012

      Petunia,

      How is the refinance process going? Do you have any tips for people to make the refinance process go smoother?

      • Petunia 100
        February 2, 2012

        I have read several places that the easiest way to do a Harp refi is with your current lender. My lender is Wells Fargo.

        I submitted an online inquiry on WF's website and a local mortgage consultant called me promptly.

        Thus far, I have met with the mortgage consultant once. I provided a copy of my homeowner's policy declaration page and answered a few questions regarding income, assets, and liabilities. She has explained that there will be a market appraisal (based on recent sales in my neighborhood), and they will pull my tax returns (I will sign a 4506T). From here on, everything will be email until I sign final docs.

        The loans are at market rates.

        The program does not officially start until Feb 6 for loans at 150% LTV or less, Feb 13 for loans of any LTV. I cannot lock my rate before then (and I am not entirely certain which group I am in). The last few days the rate for a 30 yr fixed has been 3.875. Unbelievable! I really hope it stays there while I am waiting to lock.

      • YFS
        February 2, 2012

        What are you loan terms now? How much would you save per month if you can lock in a 30 year fixed at 3.875?

      • Petunia 100
        February 3, 2012

        I am 4 years into a 30 yr fixed at 5.25 now. If I can lock at 3.875, my payment will go down $190 per month. I'm a single mom with a modest income, and that amount is significant to me.

        As the refi progresses, I will let you know how it is going.

  3. David
    December 11, 2011

    The idea is good, but the effectiveness of this program has not. I have found that only a very small percentage of home owners have actually been able to qualify for the program. The hoops they have to jump thru are enormous and if they don't qualify it has hurt their credit.

    The government created the housing crisis, now they think that can fix it. Go Figure.

    • YFS
      December 11, 2011

      Interesting.. I thought the new program was supposed to alleviate the issues of the last version of the HARP. Also, why do you think the government created the housing crisis?

  4. Aloysa
    December 8, 2011

    It is a good option for those who need it. I actually had a customer who had to sell his house as a short sale because his real estate agent advised him not to pay mortgage since he could not find a good refinancing program. Can you imagine?

    • YFS
      December 8, 2011

      Ouch it sound like that real estate agent was overstepping their boundaries just to get a sale. I am willing to bet the agent profited from the short sale. Now the homeowner has to deal with ruined credit because of they were seriously delinquent on their mortgage.

  5. Miss T @ Prairie Eco
    December 8, 2011

    Sounds like a valuable option for some. We don't have these kinds of plans in Canada.

    • YFS
      December 8, 2011

      Miss T. This was a by product of the real estate crash. I noticed you said a valuable option for some. Do you think it is fair?

      • Miss T @ Prairie Eco
        December 8, 2011

        It really depends. I am not a big believer in exceptions. Everyone should have access to the same stuff.

    • Kevin @ Debteye
      December 8, 2011

      What's the general housing market like in Canada? I'm sure it's not half as bad as it is in America?

  6. YFS
    December 8, 2011

    Shaun is there a housing crisis in the U.K. as well? Some areas in the U.S.A. were hit extremely hard. I was at a loss for words when Eric specified his estimates for how much value he perceived was lost on the low end.

  7. Shaun @ Money Cactus
    December 8, 2011

    Sounds like a good initiative, hope it all comes through. It is terrible to hear about the housing slump over in the US, I hope the recovery comes soon.

    @Eric well done on hanging in there, I hope things turn around for you and you come out in front sooner rather than later.

  8. krantcents
    December 7, 2011

    I hope this works so no more homes are added to the long list of foreclosures! The less foreclosure inventory, it is more likely that home values will increase.

    • YFS
      December 7, 2011

      Interesting point of view. Do you think HARP is good for housing in the long term? or Do you think government shouldn't tamper in the markets directly?

    • Kevin @ Debteye
      December 7, 2011

      I don't think HARP is primarily used to prevent foreclosures. Bank's really need to follow through with Obama's Making Home Affordable program and really put the consumer's first. Or, they need to come up with more internal programs to help the consumers. However, I agree that bank's shouldn't go trigger happy giving out modifications to everyone in need. The consumer should be able to comfortably afford the payments.

  9. YFS
    December 7, 2011

    What I find extremely funny is I received two emails today from Amerisave mortgage on refinancing my loan under the HARP. Weird…

    • Kevin @ Debteye
      December 7, 2011

      They're watching you! :)

  10. Kevin @ Debteye
    December 7, 2011

    If a homeowner is underwater, and is currently NOT paying PMI, I wonder if the lenders require a PMI if they quality for the HARP?

    • YFS
      December 7, 2011

      No, you won’t need to pay mortgage insurance. If your current loan doesn’t require PMI, your new loan won’t require it, either.

      • Kevin @ Debteye
        December 7, 2011

        This is interesting. I used to run a loan modification company a few years ago, and the HAMP programs were disastrous. I wonder how many people are successful in with this program.

      • YFS
        December 7, 2011

        It seems you have a prospective in which many people want to know about. Why were the loans so disastrous?

      • Kevin @ Debteye
        December 7, 2011

        The HAMP required delinquent borrowers to go on a "3 month trial" plan to prove to the lender that they can make the reduced payment. Afterwards, most borrowers were supposed to get switched into a permanent modification of their mortgage.

        The problem was that some borrowers went 6+ months paying their mortgage, and then the lender didn't approve their modification. And afterwards, they ended up foreclosing on their homes.

      • YFS
        December 7, 2011

        Wow now that isn't right. So you're telling me, people me the requirements and still were foreclosed upon?

      • Kevin @ Debteye
        December 7, 2011

        Yeah, messed up right? The money that they paid went towards their delinquent balance, so pretty much they were paying for nothing. They might as well just used that money to save up for a rental property.

        However, I THINK most banks are becoming better at processing these modifications. Most of the processors there were unfamiliar with the new guidelines, since it was something new to everyone.

        But if you were able to get approved, I've seen some extraordinary interest rates as low as 2% for 40 years.

      • YFS
        December 7, 2011

        Holy crap 2%. I would refinance under the HARP for that. Fortunately, my home increased in value.

  11. YFS
    December 7, 2011

    You make some good points. But, I think the problem is that in the U.S. we treat home ownership like a right instead of a privileged. We subsidy housing, promote housing, cater to home owners. This coupled with the lax lending standards made demand for housing > supply. Hello bubble! What do you mean are these mortgages portable? If you move for work you still need to pay your mortgage. It stays with you like any other obligation.

  12. John@MoneyPrinciple
    December 7, 2011

    Gosh. I realised that things were pretty bad in the rural hinterland of the US but an average slump of 30% with 16% still in negative equity some 3 years after the crash is pretty mind blowing. The basic problem with the US – and don't take this the wrong way please – is that the country is too big for the population. In certain areas on the east and west coast maybe this isn't true and I would guess that the slump hasn't hit uptown LA, NY City and DC or wherever.

    Over here there are pockets which were poor before and they have been hit quite badly. Any common type of housing has been hit but desirable Edwardian housing has been very resilient.

    But after all this, what will happen? Clearly it is advantageous on a short term basis to get a better mortgage deal and HARP sounds a move in the right direction. But are these mortgages portable? If you have to move for work or whatever, can you take the negative equity with you? Because negative equity is a millstone round people's necks sometimes for the best part of a generation.

  13. Eric J. Nisall – Dol
    December 7, 2011

    I already tried to apply for the new, revised program and was met with wonderful news–the details aren't finalized yet, specifically the removal of the 125% LTV cap. Supposedly, the politicians and bureaucrats can't get the language or something straight and it won't be ready to be sent to banks until the 2nd week of January 2012. I was hoping that this time around, it would be a little smoother process than the original plan, but so far, it just looks like more of the same.

    • YFS
      December 7, 2011

      Don't give up hope yet. The new program still might help you. I'm curious how value did your home lose compared to your purchase price?

      • Eric J. Nisall – Dol
        December 7, 2011

        It should definitely be able to help me, but it gets frustrating when they announce that it will be in place on a specific date, then to find out that it isn't ready. I guess no one in government knows that it's smart to wait until everything is ready to go before announcing things.

        I'm probably around a 48% loss on the low end. I haven't had an appraisal done, so I can't be 100% sure, but based on recent sales and "home value" websites that is a decent starting figure.

      • YFS
        December 7, 2011

        48% loss on the low end?!? Wow. That's a serious loss in home value. What is your plan if the HARP doesn't work?

      • Eric J. Nisall – Dol
        December 7, 2011

        I'm just going to honor my commitment and continue to pay my mortgage on time and in full each month. I'm not behind or anything, but I was unemployed for 8 months in 2008 and spend a significant amount of savings keeping my obligations current. I figure that this would be an opportunity to at least get out from under my ridiculous interest rate of 6.875% and put the interest savings toward reducing the principal balance or toward investments.

      • YFS
        December 7, 2011

        Yea if you get a reduction in interest that would great. High principle + high interest rates was the main reason why I sat out the housing market until 2009. Good luck.

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