FHA has completely eliminated the recent underwriting changes that they announced on February 28th regarding the need to pay any open collection or charge offs greater than $1,000. This is HUGE news!!! Some estimates have come out that up to 20% of loans that were approved last year would NOT have been approved this year, and the industry has been pummeling FHA every since the original announcement.
On Friday, the word started to sneak out about this change, and the Mortgagee Letter was formally issued yesterday. IT IS OFFICIAL!!!
The original rule when announced was supposed to go into effect on April 1, 2012. FHA then backed off in early April, and postponed the start date to July 1, 2012. And now, they have done away with it completely.
There are many changes to the old HARP Program to the new HARP 2.0 (Homeowner Affordable Refinance Program). There is no loan to value limits. You can refinance no matter how far your home has fallen in value. The loan to value limits before were 125%. Some cases you may not need an appraisal and the underwriting is simple compared to standard refinances. The program was extended until December 31, 2013.