Posted by: Timothy Ellis (The Tim)

Tim Ellis is the founder of Seattle Bubble. His background in engineering and computer / internet technology, a fondness of data-based analysis of problems, and an addiction to spreadsheets all influence his perspective on the Seattle-area real estate market.

12 responses to “Reader Question: What’s the Deal With HARP 2.0?”

  1. Jacob Beaty

    My wife and I went through the grueling process to refinance via Harp 2.0, I originally bought a home in 2006 with an 80-10-10, the 80 LTV was a 7/1 arm staring at 6% the arm was indexed to 1 year cmt + 2.75%. We originally tried to do a 20 year fixed but after being originally pre-approved on my salary alone the underwriter messed up on calculating the back end DTI (forgot to include our current mortgage, eventhough we provided a mortgage statement), we had to restart the processes with a 30 year fixed @ 4.625%, which at the time was about 50 bps above h quoted rate. I really didn’t care because it was (now) an investment property, it lowered my payment roughly $200 a month and I got rid of the adjustable rate exposure. All in all it was a huge pain in my a$$, but saved me cash

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  2. Kary L. Krismer

    As to Jillayne’s comments about rate advertising being deceptive, a couple of years ago there was one company in Washington who never did a single loan of the type they repeatedly advertised on the radio. It was 100% bait and switch. I don’t remember the name of the company.

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  3. StillRenting

    I will also put in a recommendation for Rhonda Porter. We used her to get our loan this summer, after reading her blog posts for years. Ours was a purchase with a VA loan, not a refinance, but she was very helpful, the whole mortgage master team was great, and we got a great rate.

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  4. sofwarenginer

    To HARP or Not to HARP?

    Refinancing to avoid a FC or afford dinner tonight seems acceptable to me, albeit don’t get into that noose in the first place is my advice.

    The problem in a nut shell is most of the loan load in the first 3/4s of the loan is interest, so refinancing means even less principle paid down ASAP, irrespective of interest rate or monthly payment.

    As to banks integrity….LOL….now you have SWE rolling on the ground in laughter.

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  5. Russ

    I recently refinanced my home with Wells Fargo using what they call their Close at Home, Three Step refinancing System. When I originally got the advertisement in the mail, I didn’t think much of it and almost threw it out. When I called they quoted me 3.5% with no closing costs. I locked it then and there and three weeks later the loan was closed. Our LTV was probably north of 90%. They did a credit check, but they required no financial documentation(bank statements, w-2, etc), just proof of employment. The original loan was Fannie Mae, serviced by Wells Fargo, and I just received notification that the new loan was just sold back to Fannie Mae. Shockingly, one of the easiest financial transactions I ever went through.

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  6. Scotsman

    Plenty of potential customers. What is the incentive for the banks to refi a paying loan to a lower rate again?

    Percentage of each age group that is underwater:

    http://www.doctorhousingbubble.com/wp-content/uploads/2012/08/zillow-underwater-young-owners.png

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  7. Seattlite

    I refinanced my condo under HARP2 about a month ago and the process was arduously long (took 3 months). I took quotes from 3 different banks
    – BofA
    – Becu
    – Nation Star (they owned my previous mortgage and new one too)
    and finally went with Nation Star.
    While both BofA and BECU offered me slightly better rates but they told me that I need to pay PMI which was coming out to ~ $300. Nation Star owned my previous loan and offered to keep the PMI at same amount i.e. ~$120.
    My loan amount was ~218,000 and condo was accessed around $125000. My final rate was 4.62%, Nation star told me that this is the best they can do for a condo since condo have higher rates.
    My credit score is 750 +, no credit/loan of any kind, 6 yrs of jobs history and an income into 6 figures. I thought I should have gotten a better deal but seems like there isn’t much choice out there. Overall I am happy that I am saving over 350 dollars a month now, process was very slow and document intensive but it worked out in the end.

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  8. Ira Sacharoff

    RE: Scotsman @ 7
    But what would Keynes or Hayek say about HARP?
    http://www.youtube.com/watch?v=d0nERTFo-Sk

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  9. Rhonda Porter

    RE: StillRenting @ 4 – Thank you!

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  10. Seattle Veggie

    I refinanced under HARP 2.0 with Homestreet Bank (Kate Beck) a few months ago and it was quite easy – closed in about a month or so. I also went to BoA to see what they could offer, (they held my original loan – house was bought in 2006) and they wouldn’t give me the time of day. The LTV was 117% and the rate is 4.375%, which saves us $500 per month off the previous payment.

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  11. Jeff

    We went through Costco’s program and got a great deal through Sterling Savings. $600 loan fee, no appraisal and 3.625 for a 30 year. It was through Harp, which helped us avoid the appraisal and assured we’d get the loan no matter what the LTV was. (We were a little north of 80% LTV). Anyway, I was very happy with the process and liked avoiding some of the std loan origination fees etc. We’re saving over $400 a month now! My only regret is that rates have come down even further but, regardless, it was a great move for us!

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