March 21st, 2012 12:44 PM by Preston Ware
This week has proven to be an exciting week. As promised many banks are following through with their pledge of HARP loans over 125%. So far it has been difficult getting pricing out of many of our banking leaders. Comparing our pricing to what this program was 6 months ago, they were smart enough to raise interest rates .375% to .5% before they came out with the renewed guidelines. Also we have to take into account the added risk to the banks and the government. Loans under 105% have one set of pricing. Loans 106% to 125% have a different set of pricing, Loans over 125% should be priced higher due to the higher risk.
Also keep in mind if you have a second mortgage, this is not a problem. All of the guidelines I am seeing will allow you to subordinate that 2nd and keep it in second place. The servicer on your second mortgage will have to sign off on that, but they will because you are lowering their risk by lowering your monthly obligation on the first. This program will have an excellent long term effect on our countrys road to economic recovery.