A HARP 2.0 Refinance and Mortgage Insurance
When the HARP program originally started in 2009, the government encouraged the refinance of loans that had MI. However, there was some reluctance on the part of Mortgage Insurance Companies because of the way the program had been written. In HARP 2.0, Fannie Mae and Freddie Mac have made it clear regarding their MI requirements.
Underwriting guidelines, by nature, are complicated. This is true for the mortgage underwriting guidelines set out by Fannie Mae and Freddie Mac. This is also true for mortgage insurance underwriting guidelines.
The good news is that the MI companies have simplified the process, relying on the lenders to verify that the borrower is eligible for a HARP refinance loan. The new HARP 2.0 program will be rolled out in its automated version by Mid-March 2012. This means that you, the borrower, will be able to switch from one lender to another. There are no barriers, from the mortgage insurance companies’ side to refinancing with LPMI, either from the same lender or a new lender. Both types of private mortgage insurance are eligible, BPMI and LPMI.
Fannie Mae’s basic requirement is that the same coverage that was on the existing loan be carried over to the new loan. They do qualify their statement, which means that there will be odd cases that must be covered differently. They also state that the MI companies are supportive of the programs for loans that they already insure.
Four MI Requirements for HARP 2.0
It is up to the lenders to offer the best package possible, although there is not much flexibility. When looking to refinance your loan through the HARP program, you will need to find a lender that works with Fannie Mae or Freddie Mac and your mortgage insurance company. Remember, after March 2012 you can work with new lenders.
Some of the mortgage insurance companies have run into financial trouble, and are not issuing new insurance policies. However, even these companies (such as Triad, PMI, and RMIC) are permitted to modify existing policies according to the HARP guidelines.
In general, the MI companies have made clear directives to refinancing HARP loans. Here are the main points:
The MI companies will not require more representations than does the GSE’s, Fannie Mae and Freddie Mac. If your lender approved your HARP loan, through the DU Refi Plus Loan or the LP Relief Refinance Mortgage, then it does not have to provide new or different information to the Mortgage Insurance Company.
2. BPMI and LPMI Products
The MI companies will allow you to switch between BPMI and LPMI. This has been a problem for many, as lenders have refused to do a HARP loan, because there was LPMI on the loan. With the new program, they can offer this option.
3. Coverage Percentage and Cost
In general, the GSE’s have agreed to accept the same coverage percentage. The rates will be based on the original loan. There may be minor adjustments, if there is a change in the loan amount i.e. if you decide to include your closing costs.
Working with the Lender and the MI Company
Usually it is up to the lender to help you determine the best loan package for your situation including the interest rate, mortgage costs (origination and discount points, title fees etc.) and Mortgage Insurance.
Here is a list of the major mortgage insurance companies and a link to pages that deal with HARP:
Mortgage Insurance Co.
Company Web Resources
|Genworth||(800) 444-5664||Genworth November 2011 update|
|MGIC||(800) 424-6442||MGIC HARP FAQ
MGIC’s Refi-to-Mod (RTM) Programs
|PMI||(800) 366-1143||PMI New Servicer page|
|Radian||(877) 723-4261||Radian HARP Eligible Modification Program|