HARP UPDATE – The Home Affordable Refinance Program Has Improved

Great news homeowners!  As I predicted the powers that be Fannie Mae and Freddie Mac have announced a new loan delivery deadline for the HARP – Home Affordable Refinance Program. (If you not sure exactly what the HARP Program is there’s a video below to give you the details you deserve!)

So, what does this update mean for me?

It means if you were denied for the HARP program because your loan mortgage was delivered to Fannie Mae or Freddie Mac after the May 31, 2009 deadline and that was the only reason for you denial you may now be eligible to refinance.

How does this rule improve the program for me?

The changes are pretty simple…

The Former Rule Stated:  A mortgage loan eligible for the HARP program must be delivered to Fannie Mae or Freddie Mac no later than May 31, 2009.

New Rule States:  Your mortgage loan Note must be dated no later than May 31, 2009.

By using the Note date (the day you closed) Fannie Mae and Freddie Mac have essentially recognized that the time span between when your loan closed and they received it should not prohibit eligibility.  (This can take to 60 days for loans that are immediately sold to Fannie or Freddie, not to mention those that are not immediately sold – so this could impact many homeowners in a positive way!)

What is a Note and where can I find it?

Your Note can be found in your closing package – it says “NOTE” in bold caps at the top of the first page and will typically be no more than four pages (and is usually only 2 pages).  If you look for “NOTE” at the top you can’t miss it.

In most cases the date of your Note and closing date will be the same.  If they are different follow the date printed at the top of your Note that will determine if your eligible for the new HARP changes.

Who should I contact for help?

Contact your chosen mortgage professional and take advantage of the HARP refinance program today or call me James Yancey “The Mortgage Lending Man” directly at 410-656-9495 and I’ll be happy to help you.

What Is HARP Exactly? (click play and get the details below!)

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What Is a “FICO Score” and How Is It Calculated

Information about you is collected from your credit application and other sources. Data includes your bill-paying history, the number and type of accounts you have, late payments, collection actions, outstanding debt, age of your accounts, and other information. Using the Fair, Isaac statistical program or model, creditors compare this information to the credit performance of consumers with similar profiles and award points for each factor that helps predict who is most likely to repay a debt. Thus comes the term “FICO Score” which means, a credit score based on the Fair,Isaac Company (FICO) model.

Credit information is weighted based upon its type and history… the more current the good or bad information, the more weighty the affect. For example a very old 90 day late may be less weighted than a very recent 30 day late. The type of data is also weighted:

1. Past Payment Performance (35% or at least heaviest weight)

2. Credit Utilization (30% or next heaviest)

3. Credit History (15% or third weight)

4. Types of Credit In Use (10% or least weighted)

5. Inquiries (10% or least weighted).

What’s a Good Credit Score?

FICO scores can impact the interest you pay on a loan. It should also be noted that general US population FICO Scores range as follows: 

Above 780 – 20%  of the population

740 to 780 – 20%  of the population

690 to 740 – 20%  of the population

620 to 690 – 20%  of the population

Below 620 – 20%  of the population

How Can I Get My Credit Score?

Credit reports can be obtained for free by calling 877-322-8228, however – consumer reports differ from a tri-merge credit report used when applying for a mortgage.  The only way to ensure you score qualifies for a mortgage is to apply and get the information you need.


Maintaining your credit report

To Maintain and keep your credit score at its peak follow these concise tips.

The first and most essential trick to improving your credit score is insuring the accuracy of each of your credit reports. Only after you are certain of their accuracy should you begin planning other steps to improving your credit score.

Your score can be improved and maintained at its peak… if you know how to do it, and after reading this you will.

Scoring models generally evaluate the following types of information in your credit report and are weighted as suggested by the percent:

On Time Payment – 35%

Have you paid your bills on time? Payment history typically is a significant factor. Your score will be affected negatively if you have paid bills late, had an account referred to collections, had a repossession, or declared bankruptcy.

Amount Owed Versus Capacity – 30%

What is your outstanding debt? Many scoring models evaluate the amount of debt you have compared to your credit limits. If the amount you owe is close to your credit limit, that is likely to have a negative effect on your score. Authorities suggest 30%-60% as desirable by creditors. Maintaining a low balance on multiple cards is better than high balances on one… but don’t run out for more cards to “even out” balances just before applying for a loan. Recent applications cost you as shown in below.

Length Of Credit History – 15%

How long is your credit history? Generally, models consider the length of your credit track record. An insufficient credit history may have a negative effect on your score, but that can be offset by other factors, such as timely payments and low balances. If you are going to close an account try to maintain the oldest accounts as age of account matters.

New Credit Accounts – 10%

Have you applied for new credit recently? Many scoring models consider recency. Similarly, if you have applied for too many new accounts recently or had to many recent inquiries, that may negatively affect your score. However, not all inquiries are counted.

Inquiries by creditors who are monitoring your account or looking at credit reports to make “pre-screened” credit offers are not counted.

Types Of Credit In Use – 10%

How many and what types of credit accounts do you have? Although it is generally good to have established credit accounts, too many credit card accounts may have a negative effect on your score. In addition, many models consider the type of credit accounts you have. For example, under some scoring models, loans from finance companies (rather than a bank) may negatively affect your credit score.

Most Important Issues

It’s likely to take some time to improve your score significantly. However, the most important issues to improved credit score are:

1. accuracy of report

2. on time payments

3. paying down outstanding balances

4. not taking on new debt.

The Final Analysis

You should also be aware that the Fair Credit Reporting Act (FCRA) is designed to promote accuracy and ensure the privacy of the information used in consumer credit reports. It is enforced by the Federal Trade Commission. Recent amendments to the Act expand your rights and place additional requirements on Credit Reporting Agencies as well as businesses that supply information about you to these agencies. Additionally, if you tell an information provider in writing that you dispute an item, a notice of your dispute must be included anytime the information provider reports the item to the reporting agency. All of this can affect your credit score in your favor. Note: the operative word is “CAN


Armed with information about what goes into the calculation of your credit score, you can develop your own plan for improving your score. Here are my nine best ways to improve your score:

Order a copy of your credit report by calling 877-322-8228. Review it carefully. Correct any significant errors.

1. Pay your bills on time.

2. Don’t open a lot of new accounts over a short time period, especially if you have a short credit history.

3. Shop for credit over a short period of time. FICO scores distinguish between searching for credit for a specific loan and searching for lots of different credit lines.

4. If you have a questionable credit history, open a few new credit accounts, use them responsibly, and pay them off on time.

5. Don’t open credit accounts you don’t intend to use.

6. A credit card or installment loan can raise your score as long as you don’t have too high a balance and you pay it off in a timely manner.

7. Keep your balance low in relation to your available credit. If your credit limit is $10,000, keeping your balance below $2,500 (25%) will improve your score.

8. Pay off credit card debt rather than move it around to lower rate cards. Moving balances to other credit cards and closing out the old account can hurt your score because it can change the ratio of your total credit card balances to your total available credit lines.


Negative items affect your credit score much more quickly than positive items. Late payments can negatively affect your score in just a few months, whereas paying bills on time may take 6 to 12 months to generate a significant improvement in your score.

Getting Negative Comments Removed

It is the legal right of every consumer to challenge ANY entry on their credit report regardless of the entry correctness or validity. Obviously, in some of the following discussion you must let your conscience be your guide. If the entry is valid, you must answer the question, “Is it ethical to challenge it?” My purpose is not to answer that question.

My purpose is to notify you of your rights and to tell you what I have seen others accomplish. (Please note. You may hear that an item must be challenged within 2 years… I have seen otherwise.)

If you challenge any item on any of your three reports, the only two things a credit bureau can do is uphold the entry validity or delete it. But the decision of one credit bureau has no bearing on the decision of the other two. You must go through this process with each bureau.

On the folowing pages are letter formats for varying challenges. What you are hoping for (especially if you already know the information is correct) is one of 3 things:

1. Credit bureaus receive thousands of disputes each day. They additionally receive 30 to 40 million bits of new data daily. It is irrational with such a vast amount of information, not to have errors. Very often the technician is just plain to tired to be entirely accurate. And often times an item is deleted in absolute error. A deletion is your goal.

2. Similarly, even if th technician does not make an error, it is possible the fatigued technician may simply be too tired to research one more entry. Therefore, he simply deletes it. It is simple human nature but the result is the same. Deletion is your goal.

3. Your third hope is that the creditor they contact either makes an error; has previously destroyed your record (many companies destroy information after 25 months to make

room for new data or simply is too tired to pay close attention and tells the credit bureau it cannot be verified. The item must now be deleted and deletion is your goal.

Any item, regardless of its age, can be challenged and I have recently seen successful challenges of tax liens, bankruptcies, three and four year old entries, as well as many other deletions. Therefore my suggestion is that if you elect to go this route, challenge EVERYTHING.

Dispute Credit Report

– You have the right to challenge all incomplete, erroneous, or misleading entries in your file. In fact, you have the right to challenge ANY entry on your credit file. In turn, the credit bureau by law must re-investigate any dispute you submit. If the entry cannot be verified, it must be deleted. Include a copy of your report with circled items and list them in your letter. Be aware that sometimes items are simply deleted if the credit bureau feels the re-verification is not worth the effort.

Sample Dispute Letter


From: (Your Name)

TO:Consumer RelationsCredit Reporting Agency

AddressCity, State, Zip Code

Subject: Dispute of Credit Report # _________________

Please review the following inaccurate items listed on my (our) credit report. In accordance with the Fair Credit Reporting Act, I understand you will check each item with the creditors listed and remove any item which cannot be verified. I further understand you will reinvestigate and reply to my request within 30 days.





Phone Number (optional)

Sample Letter To Dispute Re-Examination Findings.

Challenging CRA Findings

– As a result of your request for a re-investigation of any credit item on your file, the credit bureau may decide against you. Though they must notify you by mail, you do not have to agree and may re-dispute their findings. Additionally, The Fair Credit Reporting Act allows the consumer to have a 100 word statement added to their file for clarification purposes. If so desire, submit your statement directly to each affected bureau. Keep your statement simple and fact oriented. If needed you may want to include actions you have taken to correct the situation.

The consumer may also petition the credit bureau to to supply the name of the company which verified the findings so that the consumer may follow up directly. If you are certain the credit bureau is wrong in their findings and you have tried multiple times to have an entry corrected, you may want to notify the Federal Trade Commission (FTC) of your efforts.

To add muscle to your dispute, insure the credit bureau is aware of your intent. However do not say you will be notifying the FTC and then not follow thru.


From: (Your Name)

TO:Consumer RelationsCredit Reporting Agency


City, State, Zip Code

Subject: Dispute Investigation Findings (Ref Credit Report # __________)

I disagree with the findings of your investigation concerning the following items: ______________________________________________________ ______________________________________________________

Please re-investigate and provide me with the company names and addresses of those merchants with whom you verified the information so that I may contact them myself. Please advise me of the re-investigation findings and forward to me an updated copy of my file.



Your Name


Date of Birth

Sample Letter to the Creditor

Letter To Creditor

– If you adamantly disagree with a credit entry, it is sometimes necessary to solicit the cooperation of the originating creditor. Send the letter to customer service and continue up the chain of command to the president or CEO, if necessary. Include support documentation along with the correspondence to the credit bureau.


From: (Your Name)

TO:Customer ServiceCredit Reporting Agency


City, State, Zip Code

Subject: Dispute of Credit Report

The (name of bureau) credit bureau report indicates the following entry on my file: ____________________________________________________ ____________________________________________________

Since the information is incorrect, I have requested that the entry be removed (corrected).

However, the credit bureau has informed me that you verified erroneous information as fact.

The following, as shown in the support documentation included, is the correct information. ______________________________________________________ ______________________________________________________

Your information is a blemish on my file and I expect you to contact Experian, Trans Union, and Equifax to have this information removed from my record. I will expect a confirmation from you within 3 weeks.





Do’s and Don’ts

by James Yancey

While Your Mortgage Loan is in the Process

DO keep originals of all pay stubs, bank statements, and other important financial documentation. Is required to update any documents that are over 30 days old prior to the closing of your mortgage loan (this is required even if your loan is approved).
DO provide all documentation for the […]

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How to Improve Your Credit Score

by James Yancey

What Is a Credit Score?
A credit score is a number computed by a credit bureau and used to indicate how likely a consumer is to pay back a loan. Your score is computed by a computer program (also referred to as a mathematical or computer “model”) that takes certain data from your credit bureau file […]

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How to Determine Whether Your Loan Officer is Reputable

by James Yancey

In slower markets, some loan officers may feel pressured to close deals that aren’t in the homeowner’s best interest.  In order to avoid getting into difficult and financially compromised positions with their mortgages, borrowers are well advised to be acutely aware of the signs of a responsible loan officer when selecting a mortgage professional.
First, look […]

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