This is a great time to be in the business of selling refinance leads. For years, the market has been sluggish with lenders shying away from low- or no-equity sales. Worse, property values have gone down like the Titanic, and lenders didn’t want to be in the position of refinancing loans that were underwater – in other words, loans in which the money owed exceeded the value of the property.
The Home Affordable Refinance Program of 2012
HARP 2.0 changed the refinancing rules in the favor of both the lender and the borrower. Most people can refinance under this program if their loan is underwritten by Fannie Mae or Freddie Mac and if the loan was secured prior to June 1, 2009.
Loan to Value Restrictions Loosened Considerably
HARP 2.0 is designed to help people who are underwater when it comes to their mortgages. Although lenders may place LTV restrictions on fixed mortgages, HARP does not. If a home owner decides to refinance with an Adjustable Rate Mortgage, or ARM, the LTV ratio cannot be above 105%.
HARP will help millions of home owners refinance their homes at more affordable mortgage rates, but it isn’t for everyone. Participating in HARP will not stop foreclosure proceedings. In fact, to be eligible to participate, a borrower must have made his or her last six payments on time. He or she must also have made 11 out of the last 12 payments due on the property in a timely manner.
Other Fine Print
There are some other situations that HARP 2.0 is not designed to address. Because jumbo mortgages are not underwritten by Fannie Mae or Freddie Mac, they are not eligible for HARP.
People who have refinanced under HARP before are ineligible to do so again.
Finally, the person must have a credit score of at least 600 in order to qualify for the refinancing program.
Get In on the Action!
If you’re a lender, this may well be one of the most exciting events of the decade. Make sure you have a web page that informs customers and prospects about HARP and encourages them to call you for fill out a contact form for a free quote. Buying aged leads also is not a bad idea. In the end, the more aggressively you seek out prospects, the more your loan company stands to gain.