The answer is both yes and no.
We are seeing more and more customers complaining that they called their bank and were turned down. We recently talked about what to do when your HARP loan is declined, but it’s important to understand why it was declined. Most important is that you may actually qualify for HARP even if you have been turned down!
Bigger banks are being choosey about which HARP loans they will do and which they won’t. For example: Bank A might only do Fannie Mae HARP refinances, whereas Bank B may only do Freddie Mac HARP refinances. If you have a Fannie Mae loan, and call Bank B you would be declined. But you still may qualify for a HARP refinance! Another example is that some of the large banks are not doing HARP loans that currently have mortgage insurance.
Another concern with the bigger banks participation with HARP is their terms. We are getting reports from customers everyday that the terms they are being quoted from their bank are very high. Borrowers are being asked to pay interest rates well above the current market, to pay points, or to bring excessive amounts of cash to the closing. In the mortgage business that is known as pricing yourself out of the market. The bigger banks are under political pressure to show support for this program, that may be a reason to price themselves out of the market. They can claim they are participating, but have terms undesirable enough to drive away homeowners.
Our suggestion is to speak with a large “Mortgage Banker.” These are sizeable entities (lending over a Billion Dollars per year) with the primary focus of originating mortgages. In general they have access to the broadest range of HARP refinances and can find a way to get your mortgage refinanced if it qualifies for HARP.
You can use the form to the side to find a Mortgage Banker in your area that is participating in HARP. Most importantly, if you have been turned down for HARP by one of the big banks, make sure you ask them WHY!