What do you do when your borrower owes more than their house is worth? Can you refinance them?
Originally known as Making Home Affordable, the Home Affordable Refinance Program (HARP) is designed to help homeowners refinance their mortgage who may owe more on their mortgage than the home is worth.
Good news for you and your borrowers, the Federal Housing Finance Agency has extended the government’s Home Affordable Refinance Program by 12 months. HARP’s new end date is June 30, 2011.
There are 4 basic HARP criteria every borrower must meet:
The existing home loan must be guaranteed by Fannie Mae or Freddie Mac.
Your home must be a 1- to 4-unit property
You must have a perfect mortgage payment history going back 12 months. No 30-day lates allowed.
Your first mortgage balance must be 125% or less of your home’s market value
To check for the first requirement, both Fannie Mae and Freddie Mac have a website to verify if your borrower has a qualifiying mortgage. Fannie’s website is http://www.fanniemae.com/loanlookup; Freddie’s is http://freddiemac.com/mymortgage. If you don’t locate the loan on either website, your borrowers mortgage is backed by a third-party and is not HARP-eligible.
For borrowers that meet HARP’s criteria, there are some underwriting details which you should know.
If the original mortgage did not require mortgage insurance, the HARP mortgage will not require it, either – regardless of the new loan-to-value.
Additionally, all HARP refinances require income verification. It doesn’t matter if the original mortgage was a stated income or a no income verification loan. Your borrower should expect to produce 1040s and W-2s for their HARP refinance and asset statements, too.
Finally, second (and third) mortgages may not be “rolled in” to a new first mortgage loan balance. Suboridinate lien holders must agree to remain in a junior lien position, regardless of combined loan-to-value.
Southwest Funding offers training and support on HARP to all of its retail mortgage branch offices, as well as many other unique mortgage products. In addition, the company is able to both bank and broker these loans. If you would like more information on HARP or what Southwest Funding can do to help your business, contact us today.
Do you think people buy from features or benefits?
Time and time again the answer is always the same. BENEFITS! Why?
Because people want to know how they will benefit from using YOUR SERVICE for the biggest purchase of their lifetime.
Here’s an example on a smaller scale:
Take a ten-speed bike. Sure, it’s helpful knowing how many gears the bike has, but really getting them to feel the accomplishment of getting to the top of the amazing mountain is what is going to override the features.
If they imagine and can really feel the great possibilities involved by having YOU as their loan originator, you will make the sale so much easier to accomplish.
Why do people need to “imagine the possibilities?” Because: People buy on emotions. Every time. Even if they say they don’t.
Ever watched QVC or HSN (the shopping channels)? The presenters are the people at the top of the sales game. They can take that little Blend-o-matic or Bedazzler, talk about a couple of features for two minutes and spend the other 28 talking about benefits. They will sell millions of them. I know this for certain because my brother- your neighborhood UPS guy for the last 20 years- states that QVC and HSN channels are the cornerstone of the delivery business.
So if it’s the benefits that sell your product or service, where are you focusing your marketing resources? If you aren’t putting 90% of your marketing efforts into the benefits, we HIGHLY recommend you do so immediately.
As a mortgage professional, take a good look at your service. Make a list of the top 5 features of it. Then, write as many benefits as you can think of for each of those features. Write down every single idea, even if it’s a little silly, and then pick the top 5 or 10 to use in your marketing. Always keep in mind, your benefits should be seen from your borrower’s perspective, not yours. Been in the game so long you can’t remember what their perspective is? Ask. Send out email surveys, ask your friends outside of the business, people on the street, wherever you can think of. Once you are clear on your borrowers perspective, you are ready to promote, promote, promote.
Secondly, always try to include endorsements and testimonials when you talk about your benefits. These should be real testimonials with real first and last names, and your referrals should be willing to be contacted by your potential clients. Initials or anonymous testimonials will not seem genuine and may have the opposite affect you are hoping for!
Lastly, avoid grandiose claims like “Worlds best mortgage broker…” Instead, back up your benefits with hard data. Things like your low default rate or your ability to close a deal quickly. Show them the proof.
Southwest Funding can give you the benefits you need to be successful, plus give you the stability to keep going in a changing market. Keep moving forward!
Are you tired of paying for mortgage leads only to compete against every other mortgage broker on rate and fees? Stop wasting your time and money.
Mortgage branch opportunities with Southwest Funding open up new channels of business not available to most mortgage brokers. Have you heard of the Fannie Mae Homepath Loan? We offer it. With Southwest Funding, it is one more way to generate free mortgage leads.
· Go to www.homepath.com and use the search function to search for properties in a specific state and county
· Click on one of the properties listed. Below the MLS information you will see the Real Estate agent name and contact information
· Contact the Real Estate agent and let them know that you can do the Fannie Mae Homepath loan (If you can not, you may want to consider a mortgage branch opportunity with Southwest Funding)
Here are some benefits of the Fannie Mae Homepath Loan:
· Up to 95% ltv (primary residence), 90% ltv (second home), and 85% ltv (investment property) only needs a 660 Fico Score
· Up to 80% ltv (primary residence, second home, and investment property) only needs a 620 Fico score
· Up to 6% Seller Concessions allowed for LTV’s from 75.01%-95%, 9% Seller Concessions allowed for LTV’s 75% and below
· No MI regardless of LTV!
Southwest Funding is the net branch alternative giving you the tools, support, and resources to be successful.
2010 GFE with Calyx Point Training Video
In cooperation with the Southwest Funding compliance department, Branch Manager Alan McNamee of Southwest Funding, LP created a 7 minute training video on how to correctly populate a 2010 GFE using Calyx Point.
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