This marks the first full week I’ve been directly involved with implementing HASP loans for my clients. As such, I have communicated with nearly 100 people concerning their loans.
Going forward I plan to keep this blog updated regularly so that it can become an ongoing resource of information for those of you interested in the plan, more so than the institutional sites established by the government or the various banks involved with the program. What I mean by this is I will continue to provide you with real-time, real-life information about the program and avoid the sales pitch and some political correctness.
My observation so far is that I like the program. It is going to save a lot a people a lot of money and, done right, it appears that the initial portion of the HASP won’t cost the taxpayers anything, the operative word being “appears”.
The HASP is really two programs, a refinance program and a loan modification program. From now on I’m going to refer them as HASP version 1.0 and HASP version 2.0. It’s version 1.0 that open for business today and, from what I’ve seen, I really do like it.
Essentially, HASP 1.0 allows borrowers with excellent credit to refinance their mortgages at today’s rates, even if the equity in their homes is no longer there. In fact, HASP 1.0 will allow you to refinance your home up to 105% of the property’s value. You are even allowed to roll your closing costs into the refinance and, if you have a 2nd mortgage, that debt is not included in the formula. For example:
Home Value = $100,000
Current 1st Mortgage = $95,000
Current 2nd Mortgage = $50,000
Therefore the loan-to-value or LTV, the ratio of the 1st mortgage divided by the value of the home, is 95% ($95,000/$100,000). The combined loan-to-value, or CLTV, the ratio of the 1st mortgage and 2nd mortgage added together divided by the value of the home is 145%. ($95,000 + $50,000 = $145,000 / $100,000).
Even though the combined loan-to-value well exceeds the 105% HASP limit, because the 1st mortgage is under the 105% limit it can be refinanced. Even if the closing costs were to add an additional $10,000 in points and fees, the loan would still work under the HASP guidelines.
With all that said, if you have a 2nd mortgage there will be complications. I will deal with these issues in my next posting.
For today, THE most important thing for you to do is find out if your loan is owned by Fannie Mae or Freddie Mac. These Government Sponsored Agencies (GSE’s) own the vast majority of mortgages today. However, just because your loan is less than $417,000 (the GSE’s basic loan limit) DO NOT ASSUME YOU MORTGAGE IS OWNED BY ONE OF THESE GSE’S!!
In many instances they are not. They are owned by other investors and, as a result, they are not going to work with HASP 1.0. In all likelihood, however, they will work for HASP 1.1 or 1.2, 1.3, meaning as this program evolves I believe that the program will expand.
In addition, just because your loan is larger than $417,000 DO NOT assume that your loan is Not Owned by one of the GSE’s, as up until the end of 2008 loans to $729,250 were purchased by these agencies.
The bottom line is simply check to see if your loan is owned by one of the GSE’s. For your convenience I have included links to their sites at the end of this posting so that you can quickly find out if your loan is one of them.
Please, start here, by checking to see if your loan is owned by one of the GSE’s. If it is, contact me or your lender to see if you meet the remaining qualifications of the program (randy@ReBiz.com or 949-224-4240).
If your loan is not owned by one of the GSE’s you will need to wait for the HASP to expand. Again, I believe that this will happen over the weeks and months ahead (HASP 1.1, HASP 1.2, etc).
Meanwhile, please, continue to make your mortgage payments on-time because if you are late with a payment you will not qualify for
In summary:
HASP 1.0 – The Refinance Program
Investors: Fannie Mae or Freddie Mac
Property types: Primary Residence, 2nd/Vacation Home, Investment/Rentals
Loan Amounts: $729,750 or less
LTV (Loan-to-Value) Maximum: 105% and an appraisal may not be needed
CLTV (Combined Loan-to-Value): Unlimited, only the 1st mortgage is refinanced
Income Documentation: Stated (Meaning you do not need to provide documentation, not meaning you get to state any income you like. These loans are for qualified borrowers with good credit)
Credit Profile: Excellent credit is required
HASP 2.0 – The Loan Modification Progam
Investors: Fannie Mae or Freddie Mac
Property types: Primary Residence Only
Loan Amounts: $729,750 or less
LTV (Loan-to-Value) TBD in future posts
CLTV (Combined Loan-to-Value): TBD in future posts
Income Documentation: Fully Documented (The goal is to make your home affordable, very affordable. Details to follow)
Credit Profile: Your credit can be in the toilet! Seriously, I read that can in in foreclosure or possibly bankruptcy and this plan can work for you. “Yes we can”?
It’s a good life!
Randall A Luebke RMA, RFC
949-224-4240
I have 5 FNMA loans with GMAC- just refinanced 7 FNMA with 53rd on the HASP streamline program-. GMAC insist cn not do them because I have more than 4 loans, but 53rd did them because they service the loans and the 4 loan rule does not apply. Can you help or guide me to someone who can convince GMAC.
Thank you
I work for Bank of America. Bank of America also has a policy to not allow more than 4 loans. We do, however, make an exception for financing your primary residence. When financing your primary residence you can have an unlimited number of other loans. It is also our policy to make this exemption for HASP loans. Again, if you are refinancing a HASP loan with Bank of America you can have an unlimited number of loans, which appears to be the same policy at 53rd.
My understanding is that this “exemption policy” is part of the HASP provisions and I would have assumed that GMAC would have to play by the same rules as the other banks. That said, for all intents and purposes GMAC is out of business. They are now Ally Bank. They may have found a way to exempt themselves from the process. Link – http://www.consumerismcommentary.com/2009/10/29/gmac-asking-for-a-third-bailout-from-taxpayers/
While I do not have anyone to point you to within GMAC, if you were my client I would advise you to call again and again, and continue to escalate your calls to higher and higher levels of management. While you will never get to speak to the Chairman of the Board, my experience has been that my clients that are tenacious, generally get what they want and I have seen positive results over and over again. I am sorry that this process is such a pain and so time consuming for you. However, if/when you do complete your refinance the financial benefits are generally worth it.