Why is it that you cannot refinance/combine a 1st and 2nd mortgage with the HARP program?

Q39.Can borrowers with a first-lien loan and a home equity line of credit or a closed-end second mortgage combine the first and second mortgages into the new refinance if the maximum LTV is not exceeded?No. Subordinate financing in the form of a home equity line of credit or a closed-end second mortgage may not be satisfied with the proceeds of the refinance mortgage. This restriction includes any purchase-money second liens that typically would be permitted under our standard limited cash-out refinance guidelines.The authority given to Fannie Mae by FHFA for refinances of existing Fannie Mae loans with expanded LTVs and MI coverage flexibility is specifically limited by FHFA as follows: "The refinance will not have a cash-out component, except for closing costs and certain de minimis allowances to cover items such as association fees, property tax bills, insurance costs, and rounding adjustments."Here is the link to read the entire underwriting guidelines. https://www.efanniemae.com/sf/mha/mharefi/pdf/refinancefaqs.pdfI can help you with additional guidance if you like.ENG Lending, A Division of Bank of England, always puts your best interest first. We would appreciate the opportunity to serve you. Please visit us at www.cincinnatimortgagerate.net. You will soon find that we are so much more than a Mortgage Banker; we are a company that is dedicated to empowering our clients and referral partners. Don't forget to visit our Facebook Fanpage at http://www.facebook.com/pages/ENG-Lending-Cincinnati/171183536269710#!/pages/ENG-Lending-Cincinnati/171183536269710?sk=wall Or Call Anytime 513-403-6260

The intent for HARP was to allow borrowers stuck in a bad mortgage, ie ARM or interest only, etc, the option to refinance and take advantage of today's lower rates. First lien positions are the loans that are owned by Fannie/Freddie... 2nd liens are almost always portfolio and are uninsured. By allowing Fannie/Freddie loans to refinance into lower rate, and more stable loans, it would potentially keep these loans performing rather than defaulting. WilliamAcres.com