HARP 2.0 Refinance Guidelines for Kentucky Mortgages


HARP 2.0 Refinance Guidelines for Kentucky Mortgages
HARP 2.0 FAQ’s for Kentucky Mortgages
Date: May 8, 2012
Since the original publication of our first HARP 2.0 Q&A document on March 28, we have received additional questions about the loan program. Additional questions have been added to the original list, with the new ones highlighted in red to make it easy for you to locate them, and to keep the entire Q&A together in one place.

Mortgage Insurance

1. Do loans with Lender Paid Mortgage Insurance (LPMI) qualify for the mortgage insurance transfer? Yes, if the LPMI was paid in an upfront lump sum (Single Pay).
2. If LPMI is paid monthly by the current servicer, can this mortgage insurance be transferred? No, monthly LPMI is not transferrable.
3. Is there a charge to transfer mortgage insurance? Genworth, MGIC, Radian, and UGIC do not charge to transfer the mortgage insurance at this time.
4. If mortgage insurance is transferred, will the mortgage insurance company continue to reference the appraised value/purchase price associated with the original mortgage? The current appraised value (or what was entered in DU/LP to receive a Property Inspection Waiver) of the HARP 2.0 loan will be used. Mortgage insurance will automatically be removed when the Loan-to-Value (LTV) reaches 78%.
5. Will the MI percentage increase? Because Cole Taylor is only transferring the current MI cert to the new loan, the percentage of coverage will remain the same.

Appraisal and LTV

1. Will the Kentucky Mortgage  borrower be charged a fee if the loan qualifies for a Property Inspection Waiver (PIW) or Home Value Explorer (HVE)? No,  does not charge a fee for this.
2. Is the PIW disclosed on the GFE since  Mortgage pays for it? No, the PIW should not be disclosed on the GFE.
3. What value is used on the 1003 for LTV purposes and pricing? – For DU Refi Plus loans, use the value that was originally submitted to DU. – For Freddie Relief Open Access loans, use the HVE Value estimate shown in the LP feedback.
4. How is LTV calculated when using LP? If you are not getting an appraisal, the LTV should be calculated using the HVE estimate as the appraised value.

1. Do I have to use the HVE estimate? No, you do have the choice to order an appraisal. If you submit the appraisal to Kentucky Mortgage, you may not change back to the HVE estimate.
2. What should be done if LP findings have a lower HVE value and that value no longer returns an Accept Eligible finding? HVE values are updated periodically by Freddie Mac. As long as the previous HVE value is not more than 120 days from the note date, the original HVE value can be used.

Condominiums

1. Are condominium questionnaires required for Louisville Kentucky HARP 2.0 refinances? – For DU Refi Plus loans, a condominium checklist is not required. – For Freddie Relief Open Access loans, an abbreviated checklist is required to ensure the condo is not in a Freddie Mac Ineligible Project. The checklist is posted in the AVISTA Resource Center.
2. Does a condominium project have to be warrantable? – For DU Refi Plus loans, need to verify the loan is not a condotel, in a houseboat project, or subject to segmented ownership or timeshare. – For Freddie Relief Open Access loans, the condominium checklist will be required to ensure the condominium is not in an ineligible project.
3. Are there any special LTV restrictions for high-rise condominiums? Normal LTV guidelines apply to high-rise condos (except in FL—see the underwriting guidelines for more detail on FL condominiums).

Miscellaneous

1. Will there be any exceptions to the HARP 2.0 credit score guidelines for Kentucky Mortgage Borrowers ? No exceptions to the credit score guidelines will be allowed.
2. Can a borrower be removed from the original loan? (Not a new question, but just reiterating.) Yes, a borrower may be removed as the result of a divorce. The borrower must be removed from the deed and evidence that the remaining borrower has been making payments from their own funds for the past 12 months must be provided. If the borrower is removed due to death, evidence that the remaining borrower has been making payments from his/her own funds is not required.
3. If a current loan was refinanced in 2008, is the loan now eligible for Kentucky Mortgage for a HARP 2.0? Yes, as long as the loan was delivered to FNMA/FHLMC by May 31, 2009.
4. Can the current escrow waiver be applied to the new loan? If the new LTV is over 80%, an escrow waiver will not be allowed.
5. Can the occupancy type of the property change? There is no requirement that the occupancy of the property must stay the same.
If you need any information or have more specific questions, please contact us:

Joel Lobb (NMLS#57916)
Senior  Loan Officer
502-905-3708 cell
502-813-2795 fax
jlobb@keyfinllc.comKey Financial Mortgage Co. (NMLS #1800)*
107 South Hurstbourne Parkway*
Louisville, KY 40222*

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