home refinance

A lower mortgage rate, less paperwork, no appraisal, and faster expediting of a mortgage loan seems to be the mandate from borrowers.

So what is HARP?

The Home Affordable Refinance Program – or HARP – was rolled out by Fannie Mae in 2009 to help borrowers refinance their homes that were underwater on the value. It didn’t matter about an appraised value; it was all about the rate and payment, so borrowers could take advantage of falling mortgage rates.

How does it work?

Fannie Mae and Freddie Mac are the GSEs (Government Service Enterprises) that supply the money to mortgage banks for conventional mortgages.

The originating Mortgage Bank or Lender takes the application, then processes and underwrites the loan according to Fannie Mae guidelines, often using an automated underwriting engine called Desktop Underwriter.

Once approved, the Lender sends its own funds to the closing table. The Lender then in turn sells the loan to Fannie Mae.

Fannie or Freddie wire funds back to the Lender, and the process starts all over again for the next borrower.  Fannie and Freddie now securitize the loans into Mortgage Backed Securities (MBSs), which are bought by Institutional Investors worldwide.

The new mortgage is assigned to a Servicer to collect payments on behalf of Fannie and Freddie. The servicer usually receives about .250% of the interest payment on a monthly basis for its services.

Two things:

Fannie and Freddie are the drivers of the guidelines. They hold all the cards and dictate what Lenders can do and cannot do if they want to sell their loans in the secondary market.

So everyone appreciates Less.

Less is More when it helps the borrower meet their mortgage needs quickly and easily.

Less is More when a lower rate saves thousands of dollars over the life of the mortgage loan.

And Less is More when the Lender can expedite a borrower’s request with minimal paperwork and an appraisal waiver.

Find out how New South Mortgage can help you:

The Will Worthington Team at New South Mortgage keeps it simple. We make refinancing or purchasing your home quick and easy.

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