Saturday, May 12, 2012
So have you heard about the government created refinance program that is named after a musical instrument (HARP)?
Actually, it’s not related to a musical instrument at all but is an acronyn for Home Affordable Refinance Program. Unfortunately, even loan officers are not clear about its meaning. The reason for that is that each lender or loan servicer seems to go by and operate under their own interpretation of how the program is supposed to work.
For example, some loan servicers are not participating at all, because they no longer originate loans and thus do not offer the program to customers that are sending them their monthly mortgage payments. Other small lenders that do originate loans but that do not sell directly to Fannie Mae or Freddie Mac are not able to offer the full benefits that the federal government intended.
In addition, lenders that do offer the program may not offer all of its features. For example, some lenders can offer HARP to customers with Freddie Mac loans but may not offer it to loans insured by Fannie Mae.
For customers whose loan servicers are participating in HARP, the main benefit is that the program allows them to refinance and lower their interest rate, even though their loan balance may be greater than their house is worth in today’s market. The problem with that idea, however, is that although they may qualify from the equity or lack of equity standpoint, they still have to qualify based on credit and income and debt ratio consideration. That aspect of the program knocks out a lot of self-employed or commissioned earners if they are making less money now than they did when they took out the loan originally.
A further complication to HARP loan approval is the existence of mortgage insurance on the original loan or a second mortgage, which has to be subordinated. The subordination possibilities depend on the second mortgage loan servicer and their guidelines.
Although the federal government allows unlimited loan-to-value on this program, some loan servicers are limiting the LTV to 105 per cent or up to 125 per cent of the appraised value. Some lenders are requiring new appraisals under the program while some are allowing an automated value to be used to determine the LTV.
So there you have it. A simple idea, that of allowing homeowners to reduce their interest rates and monthly payments, but a complicated and cumbersome process that only the federal government could have created. Thus a lot of would-be qualifiers for this program are singing (or strumming) the HARP blues.
- Sam Thompson
Sr. Loan Officer & Renovation Specialist
Posted in: Intown Atlanta Real Estate News
Thursday, May 03, 2012
Well, here it is…the final in our five-part series of Common Household Items and how they can be used to do different, useful things for you!
Soda (coke/pepsi, etc. NOT diet drinks)
1) Clean car battery terminals by pouring some soda over the terminals and letting it sit. Remove the resulting, sticky, residue with a wet sponge.
2) Loosen rusted-on nuts and bolts by placing a rag, soaked with soda, around the bolt for several minutes.
3) Make cut flowers last longer by pouring about a ½ cup of soda into a vase, and filling with water. (The sugar in the soda will make blossoms last longer.)
4) Clear out slow drains by pouring a 2-liter bottle of soda down the clogged drain.
The above really should make you think twice about drinking too much soda!
1) Remove stubborn price tags or stickers by ‘painting’ them with several coats of vinegar. Let the liquid soak in for five minutes, then wipe away the residue.
2) Make wool sweaters fluffier by dropping a couple of capfuls of vinegar during the rinse cycle for an extra-soft feel.
3) Kill weeds between cracks in pavement, paving stones, etc. by spraying straight vinegar on them multiple times.
- Scott Askew
Posted in: Intown Living
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