Harp 2.0 Submissions Temporarily Suspended by CMG Mortgage

By Sari R. Updated on 8/27/2012

HARP 2.0 loan submissions have been temporarily suspended by CMG Mortgage, a national wholesale lender.  Their reasoning has to do with rising turn times.  CMG is overwhelmed with new homeowner business after other lenders stopped accepting HARP 2.0 loans.  All loans that were submitted or locked on or before August 21st will be allowed to close.

CMG executives acknowledge that their turn times are less than desirable and claim that once they are back in check, they will resume taking HARP 2.0 submissions.

In March, the FHFA (Federal Housing Finance Agency) eradicated limits that determine how much negative equity someone can have and still qualify for the program.  In the first 3 months of its existence, HARP totals doubled in 1Q to 180,000 refinanced.  In the past, borrowers were ineligible if he or she owed over 25% of the home’s worth on the mortgage.

Fannie Mae will send borrowers an EA 1, 2 or 3 score depending on the borrower’s risk.  The lesser amount of assets a borrower has, the worse the score will be.  CMG was one of the only wholesalers that funded some of these risky loans.  Last year, the company accepted around 6,000 applications after March and closed around 3,000 of them.