HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Dennis Gilmore — Mon, 13 Jul 2009 18:58:28 GMT

I would be able to help alot more borrowers if they enacted a law FORCING the subordinate lender to execute a subordination agreement under reasonable circumstances.

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Tom Purcell — Tue, 07 Jul 2009 15:29:25 GMT

Re: Victor's comment about the hurdle still remaining with subordinating 2nd liens behind this new 125 program; I would imagince the CLTV is 125% no matter how you slice it - so subordination agreements will be a Non-issue over 125 regardless. Unless you do some crafty negotiating with the 2nd lien holder to short refi their principal by threatening Loan Mod if they don't allow your client to close the new 125 refi??

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Collin Dye — Thu, 02 Jul 2009 12:06:25 GMT

I retract my earlier statement about the cost. Borrowing costs will definitely be an issue. I'll reserve my optimism until the full details of the program are layed out. The comments from everyone thus far indicate a lot of skepticsim as to whether this program can even truly benefit the borrower.

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

victor davis — Thu, 02 Jul 2009 10:49:38 GMT

...though I understand the 'raise the Loan To Value to 125%' which is obvious, LTV been the front end; what will the CLTV, HCLTV and TLTV be...the back-enders? The same? 125% CLTV? Now, when the program first launched in April, one of the biggest selling points was the 110% but we soon found out that most lenders were unwilling to lend on that practice and some went as far as to ignore it all together while others lowered it to 95 on the front and 105 on the back. People, if properties have depreciated over 35% in some areas what will a 125 back end do especially with the turn times we're experiencing for re-subordinations? Better yet, HARP is a limited cash out program which means the only thing added to the outstanding balance is the closing cost which essentially defeats the whole purpose; how can you expect homeowners to have more discretionary income to boost the recovery and bottom out housing if you limit their savings to just $150.00 to $300.00 a month? Though that's something its really nothing! Make it a true program where borrowers who have demonstrated the ability to not only pay their mortgage on time but all their other debts consolidate ALL their debts should they choose and the LTV allowing into one monthly payment, in which case you can save a single household $1,000.00 to more than $2,500.00 a month in some cases. That's the real housing and economic boost. You can't say 110%, then 105% and then 125% and then guess what, you can't even include purchase money second...I think the whole thing's a wash...

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Christina G — Thu, 02 Jul 2009 02:06:33 GMT

I agree that cost is an issue. The point to expanding the LTV ratio to 125% is in hopes to reach more people but if there are going to be high costs involved than that could eliminate the benefit to refinance as well.

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

mark mcdonough — Thu, 02 Jul 2009 01:50:44 GMT

i agree with the cost comments,between llpas and appraisal issues,the industry is complicating the simple to the point where alot of work is done to determine that the borrower has no benefit.

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Victor Burek — Thu, 02 Jul 2009 00:42:07 GMT

The costs are an issue. Freddie to freddie loans have restrictions on what can be rolled into the new loan. Also, with additional costs, consumers might be forced into premium pricing to cover those fees which will increase their mortgage rate and reducing or eliminating the benefit of refinancing. The biggest hurdle is the reluctance of 2nd lien lenders agreeing to the refinance by subordinating.

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Collin Dye — Wed, 01 Jul 2009 23:48:16 GMT

I don't care the cost, to be honest. If lenders start endorsing this program it opens up an additonal avenue for business in an otherwise too strict market.

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Christina G — Wed, 01 Jul 2009 23:15:51 GMT

I could be wrong but I am assuming the 125% LTV will come at a cost. I had 2 appraisals done this spring, the second one came in 30 k less than the first and that brought our LTV >95% Fannie charges 1 point for > 95% .

re: HARP Guidelines Allow for 125% LTV. Originators Still Skeptical

Collin Dye — Wed, 01 Jul 2009 22:43:46 GMT

The real question is when do lenders begin to print paper on this program???