“The Harp 2.0 Challenges, Some Old/New Issues”
We started getting prepared for doing HARP 2 loans a couple of months ago. Information started coming out a little at a time. Everything was to go live on March 17th, which meant all of the guidelines would be in place by then. Not so much.
One of the issues, many of the loans that are upside down, have mortgage insurance. This is a problem twofold, first not all lenders use the mortgage insurance companies and second no homeowner knows what mortgage insurance company insures their loan.
So, once we have taken a mortgage application and run a file through automated underwriting, it will tell, which mortgage insurance company has insured this particular mortgage.
Once we know which insurance company, we now need to find a lender that uses this company. As you can already imagine, this may create a bunch of issues:
1) we have to disclose a lender and rates at the time of the application
2) all of the lenders are learning as they go, which doesn’t make the process fun for our clients or us
3) not every lender is following the same scripts as Fannie Mae and Freddie Mac have recommended. I could go on and on, but you get the idea.
We get calls about HARP 2, each and every day, so the demand for the product is there and we are getting many clients through the maze and learning as we go.
Wells Fargo: HARP 2.0 is Catching Fire
By: Brian Collins
Wells Fargo & Co. rolled out its HARP 2.0 program in the middle of the first quarter and GSE refinancings are just now starting to roll in, company executives said Friday morning.
“The program seems to be catching on,” said chief financial officer Tim Sloan. But he insisted the new version of the Home Affordable Refinancing Program is in an “early state” and declined to provide any origination figures.
“Given the servicing book that we have – we are going to be a large part of that program,” Sloan told analysts and investors Friday morning during a conference call on the bank's 1Q performance. (See related story on the National Mortgage News website.)
The nation's largest mortgage lender and servicer originated $129 billion of single-family loans in the first quarter with HARP accounting for 15% of the total. But bank executives noted that the 15% is mostly HARP 1.0 loans -- not the HARP 2.0 variety which is expected to help more underwater borrowers than the earlier incarnation.
Wells Fargo chairman and chief executive John Stumpf said HARP 2.0 will need to be backed by marketing, explaining to people how they can qualify for the program. “We are doing that” by using the bank's retail and mortgage networks, he said.
Stumpf indicated that Wells Fargo has a “pretty good” pipeline of HARP 2.0 loans and he expects to see more volume.
The CFO said margins on all refinancings have been good. And he noted there have been recent press reports about servicers charging higher margins on HARP refis. Sloan insisted that Wells Fargo's pricing for HARP loans is “similar to any other refinancings.”
Joe Petrowsky, NMLS #6869
Right Trac Financial Group, Inc. NMLS #2709
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Manchester, Ct. 06042
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