So I would like to hear some experiences with people refinancing under the "Making Home Affordable" (makinghomeaffordable.gov) program only. Do not post if you had a traditional refinance. There are plenty of threads available for that.
My Experience: I have a duplex in Ohio that is classified as an investment property. Under USAA's guidance (https://www.usaa.com/inet/ent_utils/McStaticPages?key=advice_mor... they are accepting investment properties. My stats: 100K/yr with DW. 705 Middle FICO score Fannie Mae owns the loan $165900 purchase price Current: 87% LTV 1st mortgage (originally an 90/10 10/1 ARM) @ 5.65%. Loan resets in 2015. Wanted: 30 yr fixed mortgage @ lower interest rate.
Called USAA and asked to do a refinance. Rep. stated I had to have >70% LTV to qualify. I stated I wanted to use the new "making home affordable" program. She then asked for an application fee to proceed. Like a good FW'er I paid my $350 app fee on my Driver's Edge card. Afterwords she stated the fewest points I could have were 4.75 and the most was 8. Needless to say, I was shocked. Since I had paid for my fee, I decided to proceed just to see the interest rate.
They went through the process and passed the loan through their underwriting system. Then my application came back from Fannie's computer as rejected. The loan rep. thought this was odd and immediately talked to her supervisor. Apparently the supervisor stated there are 456 different exceptions, and they couldn't tell me what they were or more specifically why I was rejected. I don't know the sup. was being facetious or not about the number. Given my solid inputs, they both couldn't see any reason for the rejection.
Anybody else have a similar experience with a Fannie/Freddie computer rejection? Or can shed some light on my problem?
Warning for USAA members: When calling, the person who you first talk to is NOT a loan rep. I think the volume has them pulling people from other departments to help. Don't believe what they say because the currently have no guidance on the "making home affordable" program. Ask to speak to a loan rep.
I think we're going to hear a lot more stories like this. I called my lender (First Horizon Home Loans) and asked about refinancing after being turned down by two other lenders who pulled a bait and switch on me. ("Oh yeah, we'll just have to bump you up to another product if your LTV comes in over 80%." And by "bump you up to another product" you mean you can't do anything but take my application fee and the kickback from the appraisal...despite my repeated requests for full disclosure of terms...but I digress...).
Anyway, FHHL gave me the run around about the Making Home Affordable (is that even English?) plan and told me to call back and ask about "Phase II" in a week. So I called back in a week and apparently the memo about "Phase II" didn't get around to everyone yet (did I really expect them to know what the hell I was talking about with "Phase II?"...I think they were playing a joke on me...and it was probably pretty funny from their perspective). Eventually, I was told to call back again later (next week) but when I asked about the rates for Phase I I was told they were "low 5's with an origination point." WTF?!?! What a GD racket.
Thanks a lot Captain O! I hope you got a nice boost in your approval ratings farking over the honest tax payer again.
Long story short, appears to be a collosal bureaucratic mess designed to make politicians look like they care. </rant>
EDIT:
Loan info: Home Value: $480k Loan Amount: $433k LTV: 90.1% Location: Southern California Reason for refi: Want lower rate.
If you live in one of the Fannie or Freddie "jumbo conforming" areas be sure to press this issue with the folks on the phone. Escalate the call to someone who can think for themselves and go "off-script." Conforming loan limits DO exist for values greater than $417k contrary to what the CSR may insist on the phone.
Thanks for starting this thread dedicated to people who ACTUALLY HAVE EXPERIENCES TO SHARE, rather than threads asking questions for which none of us have answers.
I will share what I have learned so far:
ahoodlum said: I think we're going to hear a lot more stories like this. I called my lender (First Horizon Home Loans)
I will be contacting First Horizon in the next month or two to request a mod. I know these people need time to get their act together so I'm not trying to be one of the first.
I have also contacted Citimortgage, and their phone rep took down my contact info. About a month later a received a letter stating someone would contact me shortly. About a few weeks have passed, nothing so far.
vstrt
Senior Member
posted: May. 7, 2009 @ 6:12a
More retarded loans. Just want we need right about now.
"making homes more affordable" --- IN YOUR dreams.
If you want to make them more affordable, quit robbing the taxpayers to pay for this garbage and let home values FALL to the ground! That's how you make them more affordable. Not by refinancing JUNK!
I have my opinions and reservations about this program, but beyond complaining to my congressman/voting them out, there isn't much more I can do to stop it right now.
So logically, I should at least be looking into how I can get some of my money back through it.
OP provided a few links for us to vent. Hopefully this one can eventually evolve into an FAQ.
giddy169
Member
posted: May. 7, 2009 @ 10:09a
I have been in contact with Country wide (now BOFA) from the beginning. From there computer generated number my home is now worth $260,000. I owe $276,000 on my first and $60,000 on me second. The first thing I was told was that they could refinance my first to 105% LTV of their generated number at a rate of 5.25% and I believe one point. I then called back a few days later and was quoted and interest rate of 7.25% because the total loan amount is over 105% of the homes value. He also said call another number and tell them to lower my interest rate on my second but I haven't attempted that yet because I believe they will ask for a hardship and my only hardship is my wife and I lost 10% of our pay. As of now I have done nothing.
My first is currently at 6.25% and my second 8%. I wanted to refinance to get a lower rate but because of my homes value dropping so much because of a divorce and foreclosure in the neighborhood I don't think I will be able to take advantage of the lower interest rates.
That interest rate is higher than my current one. I think this hole setup up is just BS.
As for stating this program is BS. I totaly agree. I think its funny when people figure out the deal isnt as good as they hoped, all of a sudden the program sucks.
Note that today's local paper said only 1 person has made it through the program, with 51 others pending. The program is going to be rejiggered so it actually works. I can't seem to find the article online, unfortunately.
cyborne
New Member
posted: May. 7, 2009 @ 2:06p
He also said call another number and tell them to lower my interest rate on my second but I haven't attempted that yet because I believe they will ask for a hardship and my only hardship is my wife and I lost 10% of our pay. As of now I have done nothing.
Doesn't hurt to ask. The worst they can say is no. BTW, I don't remember paying any closing costs on my second mortgage because it was a fixed rate home equity loan.
cyborne
New Member
posted: May. 7, 2009 @ 2:25p
Not deterred by getting my 1st mortgage rejected, I called and asked about my second mortgage. Apparently USAA's new rules have higher rates (9.5%) for loans <$25K. So even if I qualified it wouldn't be worth it.
Currently there is a big issue with second mortgages. Essentially, if you used a 1st and 2nd mortgage to purchase your home with bank X and try to refinance the 1st under the MHA program with bank Y's better rate, closing costs, etc., bank X has to agree their 2nd mortgage gets paid secondary to bank Y's 1st mortgage if the loan goes south. This essentially guarantees bank X will get nothing in foreclosure, and therefore I doubt any bank would agree to this. Thus, the only way for people with 1st&2nd mortgages to get a MHA refinance is to go through their original lender since they own risk on both loans. Unfortunately, if you original lender sucks like ahoodlum's and gidd169's then you instantly hit a brick wall. In my case, I don't blame USAA because it was rejected by Fannie Mae, and they didn't give me any runaround. They also refunded my non-refundable application fee .
Apparently the Obama Administration has recognized this problem and are working on a fix. See: http://www.calculatedriskblog.com/2009/04/more-details-on-making-home-affordable.html However I don't think they've narrowed this jell-o to the tree yet.
Assuming the economy doens't suddenly improve and rates stay low, I think I'll wait to see the details on the second loan program. If what mannyv said is true, then there are still some wrinkles to work out.
Please continue to post experiences. If there are any Freddie/Fannie employees out there, please identify yourself so we can gain some insight.
kash007
Member
posted: May. 8, 2009 @ 2:15a
Awesome thread.
I have been talking to BOFA and every time I call they tell me that someone will call me back within a couple of weeks to get my information and to see if I am eligible.
Make sure you read ALL the information here: Making Home Affordable website If you do that, at least they won't try to screw you by making up BS excuses and telling you that you are not eligible. Keep in mind that if you are eligible for a modification (not a refinance), you should not have to pay any points etc.
I've called BOA twice in the last month and just like the previous poster they said I'd receive a call "within 2 weeks". Still nothing.
tarbelly
Member
posted: May. 8, 2009 @ 8:15a
All this really comes as no surprise. Gov't schemes always sound better than they do in practice. Also it seems that not every alternative being offered is worthwhile (govt scam?). If there were a deal to be found, I'm sure it would pop up here in FWF, so far it looks like no deals as of yet. Meanwhile, for every "adjustment" that is made the banks pocket some bucks from the feds. Stay tuned though, many chapters of this book have yet to be written and I'm sure "change you can believe in" will amount to a few pennies off a mortgage bill, all the while spreading the wealth of fiscal conservatives everywhere.
I'm waiting a little also to start this process. I'm with Indymac. My loan is about $330k/30 year at 6.375%. My home value according to Indymac is somewhere between 280 to 310k using their computer model. Indymac is refusing to provide any detailed answers on this program other then GO ONLINE and fill out their application. Someone from another dept will call you back in 4-6 weeks. You can ask for that dept number but last time I dialed that number, it was over an hour wait and I still couldn't get through. Gave up for now.
Kind of a side thing -- What I found though if you call in to make payment over the telephone, they will now very quickly waive that $20 lame fee they usually charge. Indymac has a cutoff online payment date and after that date, they charge a $5 online fee. So what I've been doing is just waiting until the 2-3 days before the final cutoff date for payment and call in to make the payment.
Incarnate
Senior Member
posted: May. 8, 2009 @ 9:46a
cyborne said: Apparently the Obama Administration has recognized this problem and are working on a fix. See: http://www.calculatedriskblog.com/2009/04/more-details-on-making-home-affordable.html However I don't think they've narrowed this jell-o to the tree yet. Thats only for loan modificaitons, not refinances. If you refinance your 1st mortgage, the 2nd lienholder has to agree to be re-subordinated. If your 2nd leinholder has received TARP money, they are being pressured to re-subordinate the 2nd mortgage.
personally i tried and failed multiple times - this whole refi program is BS (ive wasted over 1k on fees, appraisals, etc.. only to be told i dont qualify [this is AFTER being promised i qualify under the situation i described. what a bunch of snakes!]). beware of refis.
i think its better to try loan modification.
Incarnate
Senior Member
posted: May. 8, 2009 @ 3:44p
I have my 1st mortgage through Chase, and a 2nd through another bank. My loan is owned by fannie mae. I called Chase on April 6, and after talking to a couple different people, I did find one who was able to help. They said that I could refinancy my first loan at a rate 1.5% lower than what I currently have. Closing costs are high, though. I am still wating for my 2nd loan to be resubordinated, so I'm not in the clear yet. Refinancing is going to save me almost $200/month. I wouldn't be able to refinance without this plan, because my house has gone down about 20% in value since I purchased it.
tsalim
Happy Member
posted: May. 8, 2009 @ 5:07p
My Situation : Current LTV : 93% based on zillow Banks: Bank of America Products: No Fee Mortgage Plus ( No PMI) Called BOA on March and April and told that they will callback within 2 weeks. Nobody call back. Called again on April 29 after reading the news about BOA now accepting home affordability refinance. They said that phase 1 of the program is for only those that don't have PMI while my loan is actually has PMI, but my PMI is paid by BOA. Ask me to wait for phase 2 with without any date to expect.
Incarnate
Senior Member
posted: May. 8, 2009 @ 7:28p
tsalim said: My Situation : Current LTV : 93% based on zillow Banks: Bank of America Products: No Fee Mortgage Plus ( No PMI) Called BOA on March and April and told that they will callback within 2 weeks. Nobody call back. Called again on April 29 after reading the news about BOA now accepting home affordability refinance. They said that phase 1 of the program is for only those that don't have PMI while my loan is actually has PMI, but my PMI is paid by BOA. Ask me to wait for phase 2 with without any date to expect.
Did you have one of those loans where instead actually of paying PMI, your interest rate was a little higher?
tsalim
Happy Member
posted: May. 8, 2009 @ 8:16p
Incarnate said: tsalim said: My Situation : Current LTV : 93% based on zillow Banks: Bank of America Products: No Fee Mortgage Plus ( No PMI) Called BOA on March and April and told that they will callback within 2 weeks. Nobody call back. Called again on April 29 after reading the news about BOA now accepting home affordability refinance. They said that phase 1 of the program is for only those that don't have PMI while my loan is actually has PMI, but my PMI is paid by BOA. Ask me to wait for phase 2 with without any date to expect.
Did you have one of those loans where instead actually of paying PMI, your interest rate was a little higher?
No, BOA No Fee Mortgage Plus did not require any PMI at all. I guess, they added PMI when they change it to Fannie Mae Loan, since all FHA Loan require PMI for LTV more than 80%. Since BOA can't charge me for the PMI, BOA is paying it.
Incarnate
Senior Member
posted: May. 8, 2009 @ 10:07p
tsalim said: Incarnate said: tsalim said: My Situation : Current LTV : 93% based on zillow Banks: Bank of America Products: No Fee Mortgage Plus ( No PMI) Called BOA on March and April and told that they will callback within 2 weeks. Nobody call back. Called again on April 29 after reading the news about BOA now accepting home affordability refinance. They said that phase 1 of the program is for only those that don't have PMI while my loan is actually has PMI, but my PMI is paid by BOA. Ask me to wait for phase 2 with without any date to expect.
Did you have one of those loans where instead actually of paying PMI, your interest rate was a little higher?
No, BOA No Fee Mortgage Plus did not require any PMI at all. I guess, they added PMI when they change it to Fannie Mae Loan, since all FHA Loan require PMI for LTV more than 80%. Since BOA can't charge me for the PMI, BOA is paying it. I know you didn't pay for PMI. I guess I meant was the LTV over 80%, and you paid a little higher on the interest rate to avoid PMI. It looks like they took out PMI anyway, and just hid it in your interest rate. That may be very tough to refinance, because they may have purchased mortage insurance for a pool of mortgages instead of just your individual one.
I asked my mortgage broker if our home could be refinanced under the new program since we were within the 105% underwater range, but she told us that in order to qualify, we would have to show that we have a hardship and are in danger of foreclosure. I believe most of the people in FWF aren't in any hardship and probably wouldn't be able to take advantage of the program either.
hope
Senior Member - 1K
posted: May. 9, 2009 @ 6:50p
I just wanted to share couple of things . i am also currently talking to my lender wells Fargo fro the refi of my first loan. The rep who is helping us first denying any refi saying since i owe more than the house is worth .When i told him of all the fannie/freddie guidelines for the new program , he agreed. MY first mortgage is at 370k with 6% and second of $40 k with 7%. he is offering me 4.875% for first with 3 points . i,e i have to pay about $14k at closing . it would reduce my monthly payment by about 400$. is it worth ? Also it is o be noted that under fannie guidelines if you have a second lien ( amount dosent matter ) you have to pay preset points i.e in my case i.5 points just for having second lien . also if i pay down second lien , about 40k then i just need 1.5 points to get that rate for first mortgage.
Incarnate
Senior Member
posted: May. 9, 2009 @ 10:33p
doggyworld said: I asked my mortgage broker if our home could be refinanced under the new program since we were within the 105% underwater range, but she told us that in order to qualify, we would have to show that we have a hardship and are in danger of foreclosure. I believe most of the people in FWF aren't in any hardship and probably wouldn't be able to take advantage of the program either. Your mortgage broker is wrong. You need to show hardship to go through the loan modification, but not the refinance. Is your loan owned by Fannie Mae or Freddie Mac?
Incarnate
Senior Member
posted: May. 9, 2009 @ 10:37p
hope said: I just wanted to share couple of things . i am also currently talking to my lender wells Fargo fro the refi of my first loan. The rep who is helping us first denying any refi saying since i owe more than the house is worth .When i told him of all the fannie/freddie guidelines for the new program , he agreed. MY first mortgage is at 370k with 6% and second of $40 k with 7%. he is offering me 4.875% for first with 3 points . i,e i have to pay about $14k at closing . it would reduce my monthly payment by about 400$. is it worth ? Also it is o be noted that under fannie guidelines if you have a second lien ( amount dosent matter ) you have to pay preset points i.e in my case i.5 points just for having second lien . also if i pay down second lien , about 40k then i just need 1.5 points to get that rate for first mortgage. You need to determine if it is worth it. Looks like it may take about 35 months to break even on the refinance. It depends on how long you plan on being there.
Chase never said anything to me about paying extra points because I had a 2nd loan, but I did look through the fannie guidelines, and they do list 1.5 points for anything > 95% LTV
I emailed Countrywide (now BoA). A BoA phone screener called me back within 2 days. I talked to a loan screener who stated that Fannie/Freddie (forget which) has my house being worth $265,000, yet all the houses in my area sell for about $375,000 (I am in DC). I owe $330,000. I was transferred to a loan specialist and he said since I didn't qualify for the MHA refi, I could do their whammy-scammy refi instead but I would have to pay a high interest rate (he would not disclose it) and many fees and points. Oh, and BTW there would be a fee to re-appraise my house, and if it came in too low I would be out the $$ for it. Definitely a scam!
Incarnate
Senior Member
posted: May. 10, 2009 @ 11:51a
Monkeyman2 said: I talked to a loan screener who stated that Fannie/Freddie (forget which) has my house being worth $265,000, yet all the houses in my area sell for about $375,000 (I am in DC). I owe $330,000. I was transferred to a loan specialist and he said since I didn't qualify for the MHA refi, I could do their whammy-scammy refi instead but I would have to pay a high interest rate (he would not disclose it) and many fees and points. Oh, and BTW there would be a fee to re-appraise my house, and if it came in too low I would be out the $$ for it. Definitely a scam! Are there any recent comps that sold for $375,000, or are those a year or two old? If there are recent sales at that price, I'd say go ahead and pay for the appraisal - but do your research first. You're only betting what, like $300 on saving tens of thousands over the life of the loan?
I don't think its a scam, but you definately need to work for it. They aren't making it easy.
BuckarooBanzai
Senior Member
posted: May. 10, 2009 @ 7:36p
I just got off the phone with Countrywide after asking about the Making Home Affordable refi program. Here is my situation:
Small apartment/condo conversion unit in Las Vegas purchased 2 years ago with 80/15/5.
LTV per Countrywide model: 150% (actual LTV per comp sale on 4/15 of an identical, albeit foreclosed, unit: * 400% * Viva Las Vegas!)
Needless to say I am screwed but since the 2nd is almost paid off and the 1st is not a huge dollar amount (under 100k) I am inclined to just agressively pay it off ASAP and get on with my life. The idea of walking away is slightly tempting, but in my situation I think the actual dollar benefit to my net worth would probably not be worth the long-term consequences of a foreclosure.
I was optimistically hoping I could refi the 1st into a 15-yr fixed at less than 5%, however, the Countrywide rep simply said since their model puts me at greater than 105% LTV, I am not eligible for any refinance, neither through the gov program nor through their traditional refis.
The rep did refer to an ominous upcoming PHASE 2 and even more vaguely to a rumoured PHASE 3 that I might be able to qualify under when they come out.
I might as well wait and see, it's not like I'm going anywhere...
Javagold
New Member
posted: May. 10, 2009 @ 10:10p
My Situation : Lost Vision and need a Modification due to Hardship Current : Owe $415,00 House Value $550,000 Banks: Bank of America backed by Freddie Mac Products: No Fee Mortgage Plus ( No PMI) Went to MHA website and used checklist to see if we qualify, which we do...Then called Freddie who directed me to BOA Called BOA on March and April and told that they will callback within 2 weeks. Nobody call back. Called again on April 29 after reading the news about BOA now accepting home affordability refinance. It does not seem like anyone at BOA knows/cares what is going on , especially with the MODIFICATION side of the program....I have followed and understand this program better than the people answering the phones....The problem Timmy Tax Cheat and Obamaination did is they confused most people with THE 2 PROGRAMS , refi and modification, rolling out at the same time....VERY VERY STUPID TO DO THAt (or perhaps very smart like a fox, knowing it would become a clusterfuk)....i plan on staying on top of these bastards and getting my own "bailout" but im afraid most of the people in need out there , will not have the same luck/smarts/patience/tenacity
PS i see someone above posted about the program that has only refinanced 1 loan so far (out of an estimated 400,000 expected,when it came out)...THIS IS NOT THE MAKING HOME AFFORDABLE PROGRAM....but just a prevous bust of a program....but of course its all so confusing, there is no way anyone can stay on top of it and benefit (oh yeah one last thing the MHA is VOLUNTARY for all the banks....its up to them if they want to help you.....LOL)....its been almost 2 months since Obama cama out with MHA program and still the banks are not helping anyone, calling anyone back.....NOTHING BUT DELAYS !!!...and not a word from OBAMA about it....my guess is eventually a REVOLUTION will have to take place, the people are past the point of breaking
BuckarooBanzai said: the Countrywide rep simply said since their model puts me at greater than 105% LTV, I am not eligible for any refinance, neither through the gov program nor through their traditional refis. .what if you offered to pay down the loan to hit their 105% calculation? Would they do it then?
BuckarooBanzai
Senior Member
posted: May. 10, 2009 @ 10:53p
SUCKISSTAPLES said: BuckarooBanzai said: the Countrywide rep simply said since their model puts me at greater than 105% LTV, I am not eligible for any refinance, neither through the gov program nor through their traditional refis. .what if you offered to pay down the loan to hit their 105% calculation? Would they do it then?
I didn't think to ask that, it's moot for me since I don't have enough cash on hand to do it and don't want to take out a high-interest unsecured loan just to get a lower-interest mortgage. It might be a viable option for people who are closer to the cut-off and/or who have higher cash reserves though...
MaelIosa
Member
posted: May. 11, 2009 @ 10:34a
Suntrust Mortgage is supposedly now doing Fannie Mae refiancing under the HASP but I've got a Freddie Mac loan, and Suntrust will start accepting applications "sometime in May." I'll post back when there is more information.
HomerHomer
New Member
posted: May. 11, 2009 @ 11:49a
I'm refinancing a Fannie loan through this program with Chase (my current servicer).
Current interest rate = 6.625% (from last August) Refi interest rate = 4.875% with 1.875 discount points Credit score = 710 Closing costs = $7163 total ($3272 not counting discount points) Breakeven time = 26 months (if I use savings to pay down principal)
Estimated LTV was 91%, but appraisal came in better than expected putting us between 80-90% LTV. Hence, we will be getting an adjusted rate based on the lock date that will either be a lower rate or points.
Sorry to hear so many are having problems with the program to this point.
beatdaspread
New Member
posted: May. 11, 2009 @ 12:01p
tsalim said: My Situation : Current LTV : 93% based on zillow Banks: Bank of America Products: No Fee Mortgage Plus ( No PMI) Called BOA on March and April and told that they will callback within 2 weeks. Nobody call back. Called again on April 29 after reading the news about BOA now accepting home affordability refinance. They said that phase 1 of the program is for only those that don't have PMI while my loan is actually has PMI, but my PMI is paid by BOA. Ask me to wait for phase 2 with without any date to expect.
Just got off the phone with CW(now BoA) and was told that they would start accepting apps for people with PMI in the beginning of June. They are still trying to work out the details of whether the PMI will have to be included on the new mortgage or not. Here's what I was quoted:
Current LTV: 93% Current Rate: 6.875 New Rate: 4.875 with 1 point Credit: 720 Closing Costs: $9600 (includes point)
pyro123
Senior Member
posted: May. 11, 2009 @ 6:15p
tarbelly said: All this really comes as no surprise. Gov't schemes always sound better than they do in practice. Also it seems that not every alternative being offered is worthwhile (govt scam?). If there were a deal to be found, I'm sure it would pop up here in FWF, so far it looks like no deals as of yet. Meanwhile, for every "adjustment" that is made the banks pocket some bucks from the feds. Stay tuned though, many chapters of this book have yet to be written and I'm sure "change you can believe in" will amount to a few pennies off a mortgage bill, all the while spreading the wealth of fiscal conservatives everywhere.
I wholeheartly agree. I have yet to hear a happy camper on this program. People need to understand govt is never benevolant and forgiving. It has to tax/take away from you to provide such services. Govt programs really dont help much but add bureacracy. The irony is that the Administration will come out and say that millions are being helped in this program.
When I called Wells Fargo about it, they told me they didn't have enough information about the program yet to actually let me go through with the refinance. In the short term, though, it doesn't matter. I didn't buy my house at the top of the bubble, and I can easily afford my mortgage. Still, I won't turn down a great deal on a refi.
This may be a tangential; but based on most people's experience here, I believe, this needs to be said.
So many of you try to contact the bank directly; where most of the times you are going to deal with "phone" people (or sales people) who do not have good understanding of what you are talking about. Specially, if the issue/case is just a little unusual. Secondly, if you have to call to follow up -- more likely than not, you are going to be talking with a different person. Hence the whole story has to be told all-over again (with all misunderstanding etc.). In most cases, in addition to not having much knowledge, these people have no power with respect to your current loan or loan application. Instead of talking to some idiot phone rep at some bank, I would strongly advice you to find a "nice, smart and trustworthy" (all three traits important) mortgage broker; explain your sitation to him/her and then let them do the work. They will usually get you better rates from wholesale rate sheets, have much better rapport with underwriters at various lenders, have much better understanding of the process and guidelines. Once again, you have to find smart and honest mortgage brokers and they are hard to find. But in the end, they would be worth 2000$ they will make from such deals and in most cases will get you better rates and less trouble.
I have worked on many sides of this issue -- as a borrower through broker, as a borrower direct to the bank, as a Realtor with clients in similar situation and finally as a loan officer and mortgage broker (all in California). And trust me, I do not even want to think about the two times I tried to borrow directly through retail arm of a large bank.
Only exception to the rule, which I advice to all my loan clients is - go direct through retail arm of "your" bank (one which you have a relationship with) - for HELOCs. On these, you are more likely to get better rates/terms going direct rather than mortgage broker.
By the way, I do not understand some of the situations described here -- and I suspect strongly that it is at best due to a stupid processor or at worst due to unethical person/broker. There is no reason to perform appraisal or collect $350 application fee etc before getting fannie/freddie approval. At most, brokers/loan-officers should only charge $20-40 credit report fee upfront (which is needed at the time of file submission). Conducting an appraisal, should be an informed decision by borrower as part of loan application strategy discussion with your broker (for example, if you are targetting a 15 day lock to get best rate, I may advice you to get appraisal condition removed before doc-order and lock).
However, there is tendency amongst some loan-officers/brokers that if they have you stuck with some fees upfront, there is less chance you will go to someone else. I believe that is such an upfront fee is asked before rate-lock (unless as part of a strategy); you should assume you are dealing with unethical loan person and find someone else. Also, don't fall for a bait-and-switch trick (or get into a situation where you have invested too much in it to fall prey to bait-and-switch trick). Clearly ask to find out the pre-lock costs and minimize those so that if a bait-and-switch is attempted (which can only happen before rate-lock); you can walk away.
By the way, the issue of appraisal fees is somewhat moot because starting May 1st, new HVCC rules came in effect (another long story).
Another heads up for people counting on PMI. Many PMI companies are struggling and recently they have reduced DTI (debt to income ratio) requirement for PMI to 41% (this used to be as high as 55% only recently). So new issue we are running into is that lender approves loans (in fact Fannie/Freddie will go upto 60% DTI) but close to end, you may not get the loan because of PMI issues. Watch out for that (or at least ask your loan-officer about it). My guess is, if one needs "Making Home Affordable" loan; more likely than not their DTI may be higher than 41%. You need to investigate for LPMI (Lender provided PMI) which is usually MUCH more expensive and also usually for the life of loan (normal PMI you can get rid of after you have brought your LTV to below 78%).
Anyway, this is a moot point again -- because current "home affordable" plan is applicable for only those that DID NOT have PMI to begin and (this is the best part) EVEN IF your new LTV is 105%; you dont need to have a PMI
Another Countrywide(Bofa) experience so far: Have a 1st and 2nd. LTV with 1st loan: 97.5%. Combined ltv: 119% Current rate: 7.35% New Rate: 5.375 with 4.125! points. Fako: 854 Break-even at about 40 months. I plan on staying in the home for longer than that, plus will like the flexibility of the lower payment.
Explanation of crazy points I'm paying. 1.0 for LTV > 97 another 1.5 for high ltv or possibly 2nd loan (agent didn't seem certain) 2.5! Alt-A loan (Comp settlement was part of income. Grr!) -.875 for 5.375 rate.
I'm hoping the agent was incorrect on one of the ltv penalty points since it had been the 1st week they were trained when I initially applied.
usuallyhappygirl said: Just a warning to anyone out there trying to get a loan modification thru this BS program... I was told I qualified for a modification & was put on a 3 month trial period (which they kept extending longer & longer because they still didn't have an answer for me... went on for 10 months). The temporary modification reduced my monthly mortgage payment by $600. I spoke with many different reps over the course of the 10 month period & I asked each & every one of them the same questions & received the same answers... 1 - my mortgage was reporting current because I was current on my payments at the time the trial started 2 - my mortgage would continue to report current because my payment amount had been temporarily decreased & I was paying the amount in full & on time 3 - even if I was denied at the end of the trial period that I would just go back to making my full mortgage payment & everything would still remain current with no black mark on my mortgage record
Long story short at the end of the 10 months I received a letter in the mail stating that I had been denied for the modification. The VERY NEXT DAY I received in the mail a mortgage foreclosure letter saying that my mortgage had fallen behind & I owed $6000 within 15 days to stop the foreclosure proceedings!!! Needless to say I was nauseous & irate. I was lucky in that I was able to borrow the money & end the nightmare but want to warn anyone out there as most people would be hard pressed to do so.
So borrowers beware... PNC Mortgage modifications can get you into more trouble than you started out with!
Get a lawyer ASAP. There have been class action suits over these practices.
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