Mortgage refi question

Would any lenders refi a house that's worth ~80% of the current payoff?

I'm just curious, as I was foolish enough to refinance in June of '07 and rates are obviously much lower now. However, our market took a major hit, so the house I bought for $78k in '03 is now probably worth only $60k, even though I owe just over $70k on it.

I seem to remember there were a couple mortgage/finance folks on here, so if there is anyone specific I should talk to, I'd appreciate it!

Sure, but they are likely to only want to loan up to 80 or 90% of today's appraised amount.

I think your real question was if they would loan $70k on a house worth only $60k- unlikely. You are best off keeping the loan you've got.

I am sorry for your predicament.

If you're upside down, I'd think you're stuck. It might be possible to have a word with your current lender if they're willing to do anything but I wouldn't put my hopes too high...

my folks are in a similar boat. anyone else with any advice on getting a loan modification is appreciated.

You might qualify for a Home Affordable Refinance Mortgage. This is a program designed for folks who pay on time, could benefit from refinancing, but can't do so because they are upside-down equity-wise.

Linky

Yes, that ^^^^ seems like it could work for us. I'll double check that we're eligible, but I think we are.

bludroptop wrote: You might qualify for a Home Affordable Refinance Mortgage. This is a program designed for folks who pay on time, could benefit from refinancing, but can't do so because they are upside-down equity-wise. Linky

HARP (Home-Affordable-Refinance-Program)...FannieMae calls it "RefiPlus" and FreddieMac calls it "HomePossible"...generally the guideline is 125% of current value...and there is no PMI if you don't currently have it. You need to be in a Fannie or Freddie (Conformig) loan to qualify. You can also do a streamline FHA refinance (w/o appraisal) if you are in an FHA loan. I got out of doing mortgages a few months ago...but know a lot about the business.

Yep - you can go up to 125% of current value. You would have to look on the Fannie and Freddie websites (they have look up features) to see if they own your loan (a requirement) as this is often a different entity to your servicer (who you make the payments to). My question would be how high is your current rate? You have a relatively small mortgage balance (i'm in SoCal) and wonder if the savings would be enough to offset the costs?

ST_ZX2 wrote:

bludroptop wrote: You might qualify for a Home Affordable Refinance Mortgage. This is a program designed for folks who pay on time, could benefit from refinancing, but can't do so because they are upside-down equity-wise. Linky

HARP (Home-Affordable-Refinance-Program)...FannieMae calls it "RefiPlus" and FreddieMac calls it "HomePossible"...generally the guideline is 125% of current value...and there is no PMI if you don't currently have it. You need to be in a Fannie or Freddie (Conformig) loan to qualify. You can also do a streamline FHA refinance (w/o appraisal) if you are in an FHA loan. I got out of doing mortgages a few months ago...but know a lot about the business.

LOLs at a gubmint program called HARM! i knew it was too good to be true.

I was beginning to wonder if anyone got the joke.

Other posts labeled the program correctly - HARP is the refi plan for underwater equity situations and HAMP is the modification option for distressed borrowers.

In both cases, contacting your existing loan servicer is a good first step.

I'm hoping the HEMP plan will be announced soon.

What I really need is a good...

Homeowner Underwater Mortgage Program or maybe even a Financially Unsound Consolidation...nevermind.

Here are the stats on the HARP program and this will help you see if you have a chance.

The multi-BILLION dollar HARP program to date has helped a whooping 12,250 or 245 people per state. It's been in effect for close to 2 years now?

carguy123 wrote: Here are the stats on the HARP program and this will help you see if you have a chance. The multi-BILLION dollar HARP program to date has helped a whooping 12,250 or 245 people per state. It's been in effect for close to 2 years now?

Yep, know someone personally who tried to use it in FL. They basically were put off by lenders until they solved the problem another way. By put off I mean "We can probably help, but call next week" for months.

monark192 wrote: My question would be how high is your current rate? You have a relatively small mortgage balance (i'm in SoCal) and wonder if the savings would be enough to offset the costs?

I'm at around 8.5% right now, IIRC.

I have to lol at your "relatively small mortgage balance" comment. There aren't many homes in our area that were over $100k pre-crash, and I've seen some of them available for what we owe post-crash. Then again, I also bought an 8800 sq-ft building in our downtown for $2500...with a partially-completed 3500 sq-ft apartment on the 2nd floor, so I totally understand that we're not really 'normal' around here...

carguy123 wrote: Here are the stats on the HARP program and this will help you see if you have a chance. The multi-BILLION dollar HARP program to date has helped a whooping 12,250 or 245 people per state. It's been in effect for close to 2 years now?

Flounder fishing again?

The refi program seems to work okay if you fit into the box - it wasn't ever intended to help everyone. The numbers cited above are nonsense.

The modification program, doesn't work, and has only helped a fraction of the people it was intended for. The servicer isn't sufficiently compensated and the investor can only concede so much. Most of these scenarios are 'mission impossible' to begin with.

If you bought a house that you couldn't afford to begin with, you're broke and behind on the payments, and the house is now worth half what you paid, no amount of tweaking your interest rate is going to fix the problem. Irresponsible lending AND irresponsible borrowing contributed.

But the refi program is little more than a streamline refi, which we've done for years on FHA/VA with favorable results.

No, we're fortunate enough to still be able to afford our house(and smart enough not to over-buy in the first place, I suppose), I'd just heard about programs like this & was curious about the details.

If you try to use the HARP or HAMP, good luck. Especially if you have Bank of America. I was told we were ineligible because we were trying to refi $201,400, and our appraisal came in at $200,000. Since we were ineligible, BoA kindly offered a regular refi at a higher rate, which even went higher as the process progressed. After waiting over a month for two different BoA jackwagons to send me the latest figures in writing, I went to a supervisor and got them to cancel the whole process and reimburse me for the appraisal.

HARP and HAMP are complete jokes. Last year during the divorce things were getting pretty tight so I looked into it; it is strictly a refi of the existing balance, you cannot 'cash out'. You also have to be behind on your payments, which I was not. The dumb part of that: by the time you are in dire enough straits to even be considered for those programs it's very doubtful you will be able to afford closing costs etc. and you can't roll them into the loan, since that's considered a 'cash out'. That means, as I understand it, you have to come up with any closing costs yourself. So you are in a jam. I was with Wells Fargo, talk about a bunch of clowns.

Now that things have gotten better for me (some things that were up in the air were settled), I refi'd for 80% of the value of the house at 5% and rolled the closing costs into the loan. The guy who handled my refi told me I was actually in pretty good shape compared to a lot of folks out there. I guess there's something to be said for being financially conservative (read: 'cheap' ).

Closing costs are NOT cashout. In fact on a normal conforming refinance loan you can have the lessor of $2000 or 2% in hand and still be considered rate-and-term.

Yup, bludroptop, the stats are right. It's a program that's almost impossible to use even if you fit in the box. The cost per person helped is astronomical. They could have just paid off the loans of hundreds of people for the money spent on the few who have been served.

Just a word of warning if BofA is your loan servicer (and that doesn't mean they own your loan, only that they are the ones you make your payments to) then if you want to use their electronic payment system AND YOU DON'T HAVE A BofA BANK ACCOUNT) then they will charge you $6 if you pay in the last half of the free grace period that is a part of all home loans. They say it's not violating the terms of the mortgage note, it's a charge to use their system. The only way around it is to use a paper check and a stamp.

What most people don't realize is that the laws have changed drastically and the Too Big To Fail Banks are outside the laws of most other lenders. They are literally a federally protected class.

And yes BofA is definitely the worst. (http://www.thinkbigworksmall.com/mypage/archive/1/57831/)

Here's a blog comment from the link I gave you - "Filing false affidavits in court is a crime. Doing it once is a mistake but over and over again indicates intent, which makes it a crime. If BofA’s agent does this for them with BofAs knowledge, BofA is a co-conspirators in the commission of a crime. If a broker did this, they would be put in jail. The too-big-to-fail banks are too-big-to-fail and are politely told to try to refile accurate documents after they are caught committing perjury and fraud. It appears that the judge is apologizing to BofA for inconveniencing them. The whole system would get fixed if one BofA employee spent one night in jail. The other BofA employees would start to behave and take their customer's rights seriously. Until then, expect more of the same. If my dog pees in the house and there are no consequences, she will do it again. "

ST_ZX2 wrote: Closing costs are NOT cashout. In fact on a normal conforming refinance loan you can have the lessor of $2000 or 2% in hand and still be considered rate-and-term.

I may have misunderstood. Of course, I was dealing with Wells Fargo too. When I checked into it, it was the no closing cost/easy refinance thing they advertised on their website (which turned out to be HARP/HAMP) and the guy I talked to said it was strictly for the amount of the payoff, not a penny more, i.e. any appraisal and attorney fees would have to come from me. It would not have flown in my case anyway due to a couple of other things. So I grinned and bore it until I could get it done for reals.

In reply to carguy123:

Quick BofA Home Loan Horror Story:

I committed to a refi with them on November 24th, 2009 complete with being issued a loan number…65% equity (their appraisal), 14% debt ratio (5+ year history), lowest of all six credit scores over 700 (three each for my wife and myself), zero cash out (in fact I rounded down to the next even 10K), & a verified stock portfolio that exceeded the !@%$#*& loan amount. They, after exhausting all efforts to wear us out with endless demands for more & more paperwork, finally gave in and closed our loan on April 13th, 2010.

Six months of absolute hell…I will never, never, never do a loan with them again…they are absolutely, positively, irrefutably, and emphatically incompetent.

BofA is the biggest toolbox in the US of A.

RX Reven' wrote: In reply to carguy123: Quick BofA Home Loan Horror Story: I committed to a refi with them on November 24th, 2009 complete with being issued a loan number…65% equity (their appraisal), 14% debt ratio (5+ year history), lowest of all six credit scores over 700 (three each for my wife and myself), zero cash out (in fact I rounded down to the next even 10K), & a verified stock portfolio that exceeded the !@%$#*& loan amount. They, after exhausting all efforts to wear us out with endless demands for more & more paperwork, finally gave in and closed our loan on April 13th, 2010. Six months of absolute hell…I will never, never, never do a loan with them again…they are absolutely, positively, irrefutably, and emphatically incompetent.

Sounds like my experiences with Chase.

Haven't tried a mortgage through BoA, but they've done a fantastic job with my normal bank account through them.

The thing to remember is that the TBTFs now have a different set of rules than the rest of the world. Your local banks and Credit Unions are still under the old laws.

While you might have had good luck with the TBTFs dont' count on it continuing. Unfortunately you won't know until it's too late.

But to bring this back to the mortgage refi question, when it comes to a mortgage they have different rules and laws than all the other lenders as well. Count on closing costs to be $400- $800 higher and interest rates to be .125% - .25% higher. They also are allowed to change the costs and terms during the loan process and surprise you with extra costs and no other lender is. With other lenders if costs rise the lender has to pay them, with the TBTFs they just say "Sorry Charlie" and surprise you at closing with extras.