If you live in or own real estate in Sonoma County and need to refinance, the HARP 2.0 Refinance Program could be just the ticket to successfully reducing your interest rate and monthly mortgage payment. The Making Homes Affordable Program lifted their maximum loan-to-value requirements on March 18, 2012 for loans owned by Fannie Mae and Freddie Mac.
In other words, if your loan is owned by either entity and your loan is eligible, you could be 100 percent financed and your refinance loan will not be denied based upon valuation. In order to qualify for the HARP 2.0 Refinance, the following parameters must be met:
• Loan must be owned by Fannie Mae or Freddie Mac. To do a look-up, visit www.fanniemae.com/loanlookup/ or ww3.freddiemac.com/corporate/.
• Loan must have been originated no later than June 1, 2009.
As long as these parameters are met, you are eligible for the refinance program. It does not matter if your Sonoma County home is a primary residence, second home, vacation home or an investment property.

Refinancing with HARP 2.0
in Sonoma County

Q: I heard I can refinance with this program and not need an appraisal, is this true?
A: This is determined upfront by Fannie Mae or Freddie Mac - whichever entity owns your loan. It’s a 50-50 shot of getting a full appraisal waiver. Lately, Freddie Mac loans have provided appraisal waivers nearly 100 percent of the time.
Fannie Mae loans are a roll of the dice. When you apply with a mortgage lender for the HARP 2.0 Refinance, they will run your credit, debt, income, and assets into an automated underwriting model provided to them by Fannie Mae and Freddie Mac.
It’s sort of like Google, but for mortgage lenders, to determine credit risk up front and to see whether not the loan is approved for loan origination. If the lender computer provides that no appraisal is necessary, then an appraisal is not necessary. Sometimes the results come back where only a drive-by appraisal is required. A drive-by appraisal is approximately half the cost of a normal appraisal.
So, assume about $250 for a drive-by appraisal and $500 for a full appraisal report. If it is determined a full appraisal is needed, your loan will not be denied based on that evaluation.
For example, we are in the process of originating a loan for a client who owes $175,000 on his house. His loan is owned by Fannie Mae and his interest rate is 6.375 percent. It was determined by Fannie Mae that an appraisal was required for the transaction. The appraised value came in at $80,000, making his loan to value a whopping 218 percent.
In other words, he is 218 per

cent financed on his house,
is upside down, and he is still eligible for a new 30-year fixed rate mortgage at 4.125 percent.

Q: I bought my home in 2010 with an FHA loan, am I eligible for this refinance program?
A: Not at this time. The HARP 2.0 Refi is for loans originated on or before June 1, 2009, owned by Fannie Mae or Freddie Mac and are non-government insured. By “government,” we mean FHA Loans, VA Loans and USDA Loans.
To be eligible, the loan must be a standard conventional/conforming loan and it must be a first mortgage. The maximum new loan amount can be up to $520,950 on the refinance loan in Sonoma County.
There is one caveat to this program – for FHA Loans originated on or before June 1, 2009, those homeowners are eligible for lower mortgage insurance premiums on FHA Streamline Refinances, which requires no appraisal report. So homeowners with present FHA loans in place for the last three years should look into the possibility of refinancing.

Scott Sheldon is a local mortgage lender, with over six years of experience helping people purchase and refinance primary residences, second homes and investment properties. Visit him at www.sonomacountymortgages.com.