What costs can I expect with the HARP 2.0 Program?
Can I get cash back on a HARP 2.0 Refinance?
Fannie Mae policy does not allow borrowers to receive cash back through HARP. However, to simplify calculations when generating the new loan, any amount less than $250 at closing can be returned to the borrower. Any amount higher than this threshold must be applied to payment on the new loan in order to reduce the principal balance. The limit on this payment should be either $2,000 or 2% of the principal balance, whichever is lower. A higher amount would signify a cash-back refinance and thus would not be eligible for HARP.
Why are LLPAs required?
Although Fannie Mae already owns the risk on the existing loan, the new loan will bring with it additional costs, including the mandated holding of capital against the loan based on current risk. LLPAs, therefore, are necessary to cover these requirements.
What LLPAs apply?
Effective January 2012, Fannie Mae will be reducing the amount of loan-level price adjustments (LLPAs) applicable to HARP mortgages. Delivery fees will be eliminated for HARP mortgages whose amortization period is 20 years or less, and for those longer than 20 years, the adverse market delivery charge (AMDC) will be lowered to 0.75%. Also, refinances with higher LTVs will now be allowed. Standard risk-based LLPAs do not apply to Refi Plus loans. For more information on these changes, refer to Fannie Mae's updated Refi Plus Pricing Matrix.
How does Fannie Mae Refi Plus Pricing vary for HARP?
HARP loans being refinanced under Refi Plus now have their own Pricing Matrix that has been developed by Fannie Mae. The Pricing Matrix came about due to increased flexibilities in MI coverage, and greater LTV and CLTV ratios in addition to other qualifying criteria. Fannie Mae's updated Refi Plus Pricing Matrix at eFannieMae.com.
Does AMDC apply to refinances?
The Adverse Market Delivery Charge (AMDC) only applies to non-HARP loans under Refi Plus (manual or DU) and to those HARP loans lasting longer than 20 years. The standard AMDC is 0.25%.
Can my Mortgage Insurance company charge me a fee?
MI companies may charge modification fees for the transfer of MI certificates, and these fees can be rolled into the new loan's unpaid balance. Fannie Mae requests that such costs should be reasonable and that the new loan will continue to meet all guidelines issued by Fannie Mae and the MI company.
If I pay some fees out of pocket can I get reimbursed for them?
Yes, as long as the lender documents that you have paid the fees from your own pocket, the refund on those fees can be rolled into the loan amount and will not count toward the cash back limit.