HARP refi through Wells Fargo

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Hey guys. I apologize if this questions has been asked bofore, but I was unable to find my specific situation on the forum. We currently have a mortgage serviced by Wells Fargo, owned by Freddie Mac, 30yr fixed, 6.25% interest rate, sold to Freddie Mac prior to 2009, payoff $117,000, estimated appriased value $95,000. I spoke with a mortgage officer this morning and was told that we are not eligible for a HARP refi, reason being "non-eligible investor". I did see on the WF site that they only mention Fannie Mae with regard to the HARP program. Could this be why we were turned down? Does WF only do HARP refi's on Fannie Mae loans? I thought I would ask on this forum before completely giving up. I could see an incentive for WF to try to discourage us if possible, considering that we have 100% on-time payments and the refi would simply lower the interest rate. Should we try going through a mortgage broker? Any info would be much appreciated.

Thanks,
John

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Some lenders won't do Freddie Mac loans. My loan servicer would not, so I went elsewhere. I am about to close soon with AIM via the HARP 2.0 refi at a 3.625% 20-year term.

So how does that work? I thought HARP was pretty much forcing current lenders to refinance at hte lower rate. What would be the incentive for a third party lender to refinance my loan as a HARP instead of a traditional refi(where we would have to put down a payment to get back above water)?

HARP stands for the Home Affordable Refinance Program and is for loans owned by Fannie Mae or Freddie Mac prior to June 1, 2009.

Fannie Mae's HARP product is called 'DU Refi Plus'. (DU stands for Desktop underwriter which is Fannie's automated underwriting system).

Freddie Mac's HARP product is called 'Relief Refi'.

In your case, for a Freddie Mac loan that has been owned by Freddie prior to June 1, 2009, there are lenders that offer the 'Relief Refi Open Access', which means you can refinance with a lender other than your existing servicer.

Feel free to PM me if you have any specific questions. I have 19 years experience in the mortgage industry, with my background in Operations and Underwriting as well as Loan Origination.

-Adam
Old Hippy & Mortgage Pro

You need to find out who your investor is. Likely it is Fannie, Freddie, or something else. You can only HARP Refi if your loan investor is Fannie or Freddie.

Try these links:

http://www.fanniemae.com/loanlookup/

https://ww3.freddiemac.com/corporate/

https://www.mers-servicerid.org/sis/index.jsp (at this link you can lookup a lot of investors who aren't fannie or freddie)

Freddie Mac. Stated in original question.

ppcranger; in respect to your question as to what incentive does another lender have to refinance your existing loan for an upside down property, it comes down to two factors:

1. Freddie is placing certain guarantees on the loan so the lender does not have as much exposure.
2. The new lender is now taking on an otherwise qualified borrower who has a history of paying their mortgage and with the lower rate should continue to do so and present to them a profitable performing loan.

Not all, but most of my wholesale conduits are doing Freddie Open Access.

-Adam
Old Hippy & Mortgage Pro

We had lots of trouble with our lender (HSBC) when trying to do a HARP refi. We also had difficulty looking for another "reputable" lender that would allow a HARP refi with PMI. Eventually we ended up using our credit union, and all has been well so far. It seems even though this a government sponsored program, that participation is up to the individual bank. How ridiculous is that? Regardless, refinancing your home with HARP isn't impossible - but at least in my case it was a hell of a lot of work.

The credit union we're using is Hudson Valley Federal Credit Union.

And btw, HSBC is the absolute worst bank to ever work with. I would avoid them at all costs. They flat out lie about program guidelines, and believe that even though they've chosen to be a participant, that if the loan doesn't look promising or the terms aren't in their favor then they will simply refuse to work with you.

Try with a different lender . It can be done , dont give up

Does HARP work if I have more the 20% equity? I'm trying to see if I can refinance but Wells Fargo is saying I'm not eligible for some reason and the only thing I can think of is the LTV.

jedablack, you are not alone when it comes to the frustrations of finding a lender that meets your criteria.

I am admittedly biased, but working with a Mortgage Broker is very worthwhile for this type of transaction, as while there are HARP guidelines that spell out the product, every lender has overlays of their own criteria which will place limitations on some of the most important HARP guidelines. An experienced and knowledgable mortgage broker has many wholesale conduits to submit loans through and knows which one will best suit your individual scenario.

Whether it is LTV, credit scores, type of property, MI loan or not (and whether Lender Paid MI or monthly MI), all play a role in finding the best match.

We are compensated by the lender and provide an important service that one single bank cannot match. Plus, when comparing rates/pricing to the big banks a broker usually can deliver better terms, along with better service. (The majority of my refinances are refinancing borrowers out of BofA, Chase, Citi, and HSBC).

-Adam
Old Hippy & Mortgage Pro

anks329 said:   Does HARP work if I have more the 20% equity? I'm trying to see if I can refinance but Wells Fargo is saying I'm not eligible for some reason and the only thing I can think of is the LTV.

While HARP is primarily seen as beneficial for those >80% LTV, <80% is fine and there are a few benefits that being HARP eligible offers that regular convention doesn't. For example, while conventional Fannie guidelines have a maximum debt-to-income (dti) of 45%; HARP approvals can exceed the usual 45 dti.
That alone has helped many who may not be showing enough documented income to qualify.

Not sure of the specifics of your loan, but feel free to PM me if you would like to discuss;
-Adam
Old Hippy & Mortgage Pro

p.s. re: Wells Fargo. I am not bashing them, but they are so backed up that their customary lock in period is 45 days; while a knowledgable broker can get a refi done in 2-4 weeks, within a 30 day lock period.

But which lenders allow DTI over 45%? I have not ran into any of them yet. I have been researching for 2 weeks now.

HAPPY_CHRISSY said:   But which lenders allow DTI over 45%? I have not ran into any of them yet. I have been researching for 2 weeks now.

Conventional guidelines cap at 45% dti, except Freddie LP findings will reflect an approval up to 50% on occassion and a Freddie lender will do an exception in some of those cases.

With conventional HARP refinances each lender has their own specific overlays to the guidlines.
My wholesale conduits vary but most will go up to 55% dti (some higher, even in the low 60's) as long as the automated findings support an approval at the higher ratios.

FHA Streamlines do not require income verification (just employment verification) so ratios do not apply.

Also keep in mind that when it comes to the back ratio (total liabilities) being on the high end, the lender also takes into consideration the front ratio (housing obligation) too. For example, an exception is more likely to be granted for ratios of 25/50, than 48/50.

A knowledgable and experienced broker should be able to direct your loan to the most appropriate lender.

-Adam
Old Hippy & Mortgage Pro

Do you have any suggestions on who i can contact?

Chrissy, I just sent you a PM.
Thanks; -Adam
Old Hippy & Mortgage Pro

Wells Fargo was my original lender in 2007 then sold my loan to Freddie Mac in 2008
Freddie Mac says I'm eligible for HARP (based on not being late on payment LTV, value...)
I have a co-op apartment.
Wells Fargo says property type is not eligible based on Freddie Mac guidelines
Freddie Mac says we have no such guidelines.
I went back to Wells Fargo, they'll investigate?!?

Any had experience with HARP, Freddie Mac, Wells Fargo and the fact that apartment is a co-op, which aparently not everyone knows what it is?

Or should I just forget it and go with another lender?

Doubt Wells Fargo will be "fixing" their system for lil ole me.

Thanks.

Is Wells Fargo still your loan servicer (who you make your payments to)?

The few good Freddie HARP lenders I have do not do coops in general, so unfortunately I do not have any great referral for you, however,
I would push Wells as they are one of the few Coop lenders still out there and they will do the Freddie HARP loans for only the loans they service. Push the matter with Wells and speak with an Underwriting Manager; not the salesperson. Unfortunately there turn times are 6-8 weeks so be prepared for that.

-Adam
Old Hippy & Mortgage Pro

Thanks Adam.
Yes Wells Fargo is the loan servicer, the loan itself is owned by Freddie Mac as of 2008...among other things qualifying me for HARP.
I'll take your advice and try to reach an Underwriting Manager?
Looks like the sales people don't have "co-op" in the drop down menu. They then select "undefined" as property type and of course it says not eligible.
Sigh.


tiedyed1 said:   Is Wells Fargo still your loan servicer (who you make your payments to)?

The few good Freddie HARP lenders I have do not do coops in general, so unfortunately I do not have any great referral for you, however,
I would push Wells as they are one of the few Coop lenders still out there and they will do the Freddie HARP loans for only the loans they service. Push the matter with Wells and speak with an Underwriting Manager; not the salesperson. Unfortunately there turn times are 6-8 weeks so be prepared for that.

-Adam
Old Hippy & Mortgage Pro

Wells Fargo absolutely does coop loans, however, it may be their policy not to include it in their HARP offerings.
Here is a useful link you can refer them to: http://www.freddiemac.com/learn/pdfs/uw/reliefrefi_oa.pdf

On the second page, under 'Property Type": Attached or detached dwelling, Manufactured Home or unit in a condominium project or PUD, or if permitted by the Seller’s Purchase Documents, a Cooperative Unit

Good luck!
-Adam

Ha I sent them an email about 7 minutes ago
pointing out similar stuff in this
http://www.freddiemac.com/learn/pdfs/uw/reliefrefi_ss.pdf
and asking for contact info of an Underwriting Manager.
I'm not quite sure what "or if permitted by the Seller’s Purchase Documents, a Cooperative Unit" means, but I'm sure they do.
One of the reps also responded:

"Your mortgage with Wells Fargo is ineligible for HARP due to it being a co-op with mortgage insurance. You can check with other lenders, but I have already checked with the HARP eligibility team, and you cannot refinance this property under HARP with our company unfortunately."

If I can't push them further, I'll try other lenders.

Thanks Adam.

I have some important news to share for those whom have been wanting to do a Fannie HARP Refinance but may not have previously qualified due to no documentable source of income.

Currently, for Refi Plus mortgage loans with payment changes (principal and interest) less than or equal to 20%, Fannie Mae requires verification that at least one of the borrowers has a source of income. In lieu of this verification, Fannie Mae will now allow verification of liquid financial reserves equal to at least 12 months of the new mortgage payment (PITIA) on the subject property. These reserves must be documented with at least one recent statement (monthly, quarterly, or annual) and are limited to the following types of liquid assets:
 checking or savings accounts, certificates of deposit, and money market funds;
 investments in stocks, bonds, mutual funds; and
 the amount vested in a retirement savings account.

Lenders are not required to investigate large deposits that appear on the statements. However, Fannie Mae policy requires that certain assets be “discounted” when used for reserves (i.e. retirement assets).

Fannie also is also making changes to minimize the amount of documentation of income and assets as well.

Overall these new guidelines are designed to help lenders more efficiently reach an even broader base of eligible borrowers.
Remember that each lender will impose their own 'overlays'. Just because one lender may not fully follow Fannie's guidelines doesn't mean there are lenders who do.

This is the latest from Fannie Mae and hopefully Freddie will follow suit, as well as HUD with their FHA Streamline.

-Adam
Old Hippy & Mortgage Pro

So glad I found this forum topic! Own a condo (rental property) original loan was Wachovia or Wash Mutual, anyhow company was "acquired" by Wells Fargo, who has been servicing the loan for Fredie Mac. trying to do HARP and Wells Fargo saying they can't do it since they didn't do original loan!? Ummm, Wachovia and WashMutual don't exist anymore. wells Fargo referred me to Greenlight Financial who has a HORRIBLE rating online. I do not want to work with a cruddy company... It seems like the fact it is a Freddie Mac, a rental condo, and the fact I pay my mortgage on time makes me a less attractive customer. Any suggestions mortgage pro?

Hi all - thanks in advance for any help you can provide....

I qualify for HARP through Freddie Mac, and Wells Fargo is my current lender.

I have a 2 unit, non-owner occupied property, and Wells Fargo is willing to give me 30 years at 4.25%.
That's all fine and dandy, but they want me to pay for an appraisal, title, closing fees of $1900, and .75 points.

As far as the appraisal goes, I read on the Freddie Mac website that they use something called "HVE" that should allow the lender to not require an appraisal, but Wells says that the information they have from Freddie Mac says I am 'not eligible' for HVE.

When I compare this offer to a separate HARP offer from GMAC on another non-owner property (no appraisal required, $1400 closing costs, and 0 pts) I feel like Wells is being a bit greedy and unnecessarily requiring the appraisal.

Are there better options with an open access lender since they will most likely require an appraisal as well? Has anyone had any success with an open access lender?

Thanks again - Jim

Jim;
In this case I would believe Wells. While all findings reflect a HVE that does not mean that Freddie is comfortable with that number and some Freddie HARP loans will still require an appraisal as the HVE is not accepted.

I have not found any hint as to how their proprietary system determines these things but I am guessing it is based on how much of a variation/range of values are in the area of the subject property.

-Adam
Old Hippy & Mortgage Pro

Thanks Adam... the other thing I'm trying to reconcile is that they are charging me points and closing costs, when the loan is already with them.
I can understand a new lender, but why would my existing lender need to charge me for that? My other lender is charging me neither points nor closing costs, under the HARP program. The only difference is that Wells is a Freddie and the other is a Fannie.....

jm246, the points is relative to the pricing.
In this case there are pricing adjustments for 2 family and for investment property. Both Fannie and Freddie have these same adjustments.

Pricing has improved over the past couple of days so you can check and ask for an updated quote; plus ask what the pricing would be for a slightly higher rate.

-Adam
Old Hippy & Mortgage Pro

I chatted with the Wells Fargo rep and asked him what LTV the rate/pricing he quoted me was based on, and I now feel a lot better that they are not just being completely greedy on us....

He was initially basing the LTV at 140. After pulling the comps and seeing that we are closer to and LTV of 90 or 100, that made all the difference - the result was better pricing and NO points and NO escrow / title fees. The rep never asked, and I didn't really know to ask - the lesson: make sure the lender is quoting your pricing/rate on the real LTV.

So, after this, I think we are pulling the trigger today - between our 2 properties, HARP is saving us about $350/month, which I am very happy with.

Adam thank you for your help and willingness to assist!

To all the FW Finance Forum, Happy Thanksgiving!
-Adam
Old Hippy & Mortgage Pro

I got the same quote on Wells Fargo today. On a non-owner occupied property 4.5% down from 7.5% with $1700 I have to bring to the table plus appraisal.

Hi Tiedyed - Best information I have found anywhere on Wells Fargo Freddie Mac Harp 2.0 . I'm currently going through the process with Wells Fargo and would love to get any advice /info you may have on my chances, etc before paying for the appraisal which they are requiring. So far they have asked for stated income (~$4300 employer pay & $1500 rental income - old house I managed to hang on to with good equity....) and will verify employment but not income based on my understanding. They have asked for to see a rental agreement but say they will not ask for tax returns - which are fine but rental shows loss... I had formerly had excellent credit (A paper originally) but after going through 3 previous modification attempts with Wells which all were ultimately denied after being put on "trial modifications" etc ...long story short they maarked my credit ...my credit is now in the 650-720 range....I have always and continue to pay on time except for the "trial period" which after denial they immediately marked the difference delinquent and initiated foreclosure, etc...sorry i won't et into the details but needless to say I was very upset with the entire process but that 's story for another day....Anyway, my main worry is the DTI...how strict is Wells/Freddie with DTI ? If Freddie is currently the Investor does that mean Freddie will continue to be the Investor or is the mortgage re-writtne and then re-sold again ie could another program without DTI requirements be applied if I am not approved for the Freddie refi ? Any help/advice is greatly appreciated !!! Should I try to "exagerate" my rental income in order to try to improve my DTI ? Even to the point of including the exagerrated income on my tax returns and paying taxes on it ? I have always payed even though it has been a struggle and reducing the monthly payment will only make me more able to pay but I hav tried and tried again but just cannot clear the DTI hurdle....I'm currently paying 6.5% on $265K 30 year fixed.

As there are not that many lenders who participate in the Freddie HARP Open Access, as you are at Wells, a Wells To Wells HARP is a sound decision (regrdless of rate) as they do have internal underwriting guidelines that are a bit looser for their Wells to Wells loans.

Regarding stated income. It really just needs to make sense. Stated income for a W-2 salaried employee can be reviewed on salary.com and you can see the range they give. The Underwriter will refer to those types of averages. Rental income also must make sense for the size of the house and the location. The underwriter will also look at averages and make sure it falls within that customary range. If you are self employed you ahve more leeway as to the range of stated income. With HARP loans the standard dti guidelines are loosened as well; especially for those with excellent credit, but there are still limitations. On regular loans you are always good with a dti <45%. On a HARP loan I have regulary seen automated approvals up to 50% without issue and as high as 65% dti on occassion (but not the norm).

One thing I need to give a heads up about is your bank statements. If you are being asked to show assets, be careful if your income is being received via direct deposit into your checking. While paychecks are lower than gross income figures being used if they see your direct deposit is $2000/month and your stated income is $6000/month that may be problematic. You do not need to show all accounts and if there is a simple savings account that has no activity that is the safest to disclose if needed. (It also makes it easier to avoid being asked about larger depsoits that sometimes show up in a persons checking, especially when you may be depositing cash rent receipts each month.

Freddie owns your loan and they will continue to own your loan. Wells will remain the servicer unless they choose to sell the servicing.

In respect to them requiring an appraisal, ask them if the Freddie Mac LP findings reflect an acceptable HVE for this transaction.
The Freddie Mac LP system reflects a Home Value Estimate (HVE) and then whether the HVE is acceptable to Freddie Mac, or despite the HVE an appraisal is required. I am guessing the findings require an appraisal but an educated consumer will always help keep others on their toes.

Hope some of this proves helpful;
-Adam
Old Hippy & Mortgage Pro

Hi Adam,

Thank you so much for the info !!!

I feel much better knowing that DTI is on HARP 2.0 relaxed and that <50% should be acceptable (I should be just under .50 back and front which for me are relatively the same). I have tried so many times to refi via HARP, HAMP, traditional, etc, even offering to pay down to 80/20 but DTI has always been the roadblock.

Wells is requiring an actual appraisal and HO-6 for 20% but I will ask again since I am in a large complex cookie-cutter complex w/ a lot of recent sales - same unit, same price ~$230K.

I won't ask how you have so much info but needless to say I am so impressed and appreciative that you are sharing.

Thank you again !!!! Keeping my fingers crossed and should know in the next next couple weeks...
-Jillie
Mortage Industry Newbie

Jillie, I have yet to receive an appraisal waiver on a Condo, so that is not unusual at all.
Under 50.00% dti with decent credit on a freddie HARP is usually not problematic.
Feel free to contact me if you have any questions.

-Adam
Old Hippy & Mortgage Pro

Just wanted to update my situation and see if there is any further input out there. My Nov 2nd entry explains my situation. Well, finally found someone to work with us, WJBradley. Market has changed some in past few months, but our refinance was delayed due to medical issues. We are now moving forward, our rental condo: owe 215,000, value now is 160,000. We are doing a HARP 2 refi at 4.25%, paying 2 points. We have excellent credit, 750, but the problem was no one wanted to work with our loan since it was ACQUIRED by Wells Fargo when original lender went under, also that it is a rental property and a condo. And of course the major LTV. I believe new loan will be under Citibank. I'm bummed about the 2 points but just grateful we can finally lower the dang payment. We are still taking a loss each month, but the problem was we made just a little too much money to even write off the losses. We didn't have to pay appraisal...
Kelly, catgirl

Who currently services a HARP elibile loan has no effect on it qualifying for a HARP refinance.

On Fannie Mae owned loans, their HARP program (named DU Refi Plus) is available to all Fannie HARP participating lenders.
On Freddie Mac owned loans, their HARP program (named Open Access) is available to all Freddie HARP participating lenders.

There are MANY more Fannie HARP lenders than Freddie HARP lenders.
While Wells will only underwrite Freddie loans they originated, there are other wholesale lenders that participate in Open Access.

When it comes down to after that is analyzing each lender's 'overlays', which is that lender's specific guidelines that overlap the HARP guidelines. This is where it can get tricky as the overlays can impact qualifying your specific scenario.

As written, HARP expires 12/31/2013. All questions concerning your home financing are good ones so keep them coming;

-Adam
Old Hippy & Mortgage Pro

Hello,
I have a Freddie Mac loan and have been investigating the HARP program which I qualify for. My mortgage is with Citimortgage but I would like to pursue another lender because they keep giving me conflicting information and I don't feel comfortable with them.
Do you have any suggestions of lenders that are savy regarding the HARP program?
Thanks so much!

ctramirez8 said:   Hello,
I have a Freddie Mac loan and have been investigating the HARP program which I qualify for. My mortgage is with Citimortgage but I would like to pursue another lender because they keep giving me conflicting information and I don't feel comfortable with them.
Do you have any suggestions of lenders that are savy regarding the HARP program?
Thanks so much!


Freddie Mac HARP can be done through any lender that participates in Freddie Open Access.

As mentioned above, there are much fewer Open Access lenders than those participating in Fannie's HARP program, but there is a list of participating lenders on Freddie's site.

However, and I am admittedly biased, a knowledgable mortgage broker will be able to best handle your Freddie HARP refinance as despite having a list of participating lenders, each one of those lenders have their own 'overlays' with their own restrictive guidelines.
A good broker will not only know which lender is priced competitively (as with HARP it does vary quite a bit between lenders), they will also know exactly where to direct your Open Access loan where it would go through with the least resistance.

-Adam
Old Hippy & Mortgage Pro

We have FINALLY found a great lender and are about to close in a couple weeks!

If you guys are still looking for a lender for HARP, I suggest you call Laura Cunha. 954-448-5555
She was incredible - very knowledgeable, and more importantly after dealing with tons of banks/brokers in the last year and a half she was the one who actually pulled it off.

Just thought I would update this thread with the good news

Skipping 4 Messages...
this message is for tiedyed1 - I neeeeed help with getting my loan refi'd Wells fargo is a nightmare, I am hoping for HARP so I can get a principal reduction. Can you help me?
lionesslou2@yahoo.com Thank you so much!



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