National wholesale lender CMG Mortgage temporarily suspended new wholesale HARP 2.0 loan submissions, citing rising turn times. The company is inundated with new business from homeowners after other lenders ceased taking accepting HARP 2.0 loans.
All existing loans that were either submitted or locked on or before Aug. 21, will be accepted and can continue to close.
“Our turn times do not make us happy, you happy, or your borrowers happy. We have heard you,” CMG Chief Executive Christopher George said in a statement to company wholesale partners. “Once our turn times are back in line we will resume taking submissions of HARP 2.0 loans as we have in the past.”
The Federal Housing Finance Agency eliminated limits on how much negative equity a borrower can have and still qualify for the program, which banks installed in March. HARP totals doubled in the first quarter to 180,000 refinanced in those first three months alone. Previously, a borrower would be ineligible if he or she owed above 25% more on the mortgage than the home was worth.
Fannie Mae will send a borrower, even though they qualify, an "approved eligible" or an EA 1, 2 or 3 score based on risk. The more underwater or the fewer assets a borrower has, the worse the score. According to several brokers, CMG was the only wholesaler in California funding these risky loans.
The San Ramon, Calif.-based company took in roughly 6,000 applications since the revamped program rolled out in March. George closed roughly 3,000 of them.
"We're just doing a more thorough job, making sure the data is being checked repetitively once the loan is sold (to Fannie or Freddie Mac). If there is a default, we make sure that the default doesn't find it's way back to me," George told HousingWire in a June interview.