Refi without an appraisal?

I was recently told about this, but a quick Internet search makes it seem like the existing mortgage has to be FHA(ours isn't). Does anyone here know for certain?

It's certainly not as common as it used to be, but the original mortgage does not have to be FHA. Many lenders have streamline programs for existing customers, so you should start with the lender that you used the first time. There's also the Home Affordability Refinance Program, which you can get more info on here - http://www.makinghomeaffordable.gov/faqs/homeowner-faqs/Pages/default.aspx. I believe that program doesn't require an appraisal, although I'm not a loan originator so I'm not 100% sure.

Our loan is FHA, and we have to get an appraisal to refi.

At least according to the guy who originated our loan.

HARP 2.0 will permit many conventional loan borrowers to refinance without regard to collateral value, and some (we don't know how many) borrowers will have the appraisal requirement waived in favor of an automated valuation of the property. It officially starts 12/1 but not all lenders will participate immediately - some will hang back until the dust settles a bit.

FHA borrowers can do a streamline refinance without an appraisal in some circumstances. Due to declining market values, some lenders will insist upon an appraisal anyway.

HARP 2.0 still has a 125% value limitation until March of next year. I don't remember what it goes to after that.

Lenders usually want an appraisal due to the market. Some FHA & VA don't require an appraisal to refi.

Thanks for the help.

Our mortgage was sold & is currently serviced by Citi Financial. I'll start there & see what happens.

What does an appraisal cost?

question.

you generally have to have some equity built up in order to refinance, correct?

we have only been in our house for 1 year. we have a good fixed rate but have been hearing about better rates.

szeis4cookie wrote: Many lenders have streamline programs for existing customers, so you should start with the lender that you used the first time.

This is what I did about 8 years ago. It was called "Recasting" and just cost a one-time fee ($600). My payment didn't change much (actually went up a bit) as I went from a 30 yr to a 15 yr at the same time.

For borrowers who currently have an FHA loans to refi into a new FHA loan, if you are not taking cash out, the Streamline option with no appraisal is an option. If you are taking cash out, or don't have money to bring to closing to fund your new escrow account for taxes and insurance, you would need to have an appraisal.

For conventional (Fannie/Freddie) mortgages, while HARP is creating lots of media buzz with it's supposed no-appraisal refi option, no lenders are underwriting to this program as of right now. Also, if you are taking cash out, Fannie will always require an appraisal regardless of how much equity you have. Until six months ago or so, we were finding that borrowers with excellent credit and good equity could get an approval without an appraisal for rate and term refis. That has entirely gone away as of six months ago.

While Fannie Mae sets the lowest common denominator with its programs, lenders can and do have underwriting overlays which are more restrictive. Also, HARP has a provision which essentially says that a valuation method other than appraisal can be uses, which means that an automated valuation program utilizing home sale data would be used. This is lots of talk about a program that's pretty impotent as far as helping borrowers, IMHO.

PeterAK, Mortgage Guy

Nicely said PeterAK. FYI - I did just get a 2075 on a rate/term refi I did for a client so the no appraisal hasn't completely gone away.

/mortgage technical jargon.

Appraisals are typically in the $400-$500 range. The cost went up with the new legislation.

Also the accuracy went down and fraud is up something like 300% under the new regulations.

Also lenders aren't allowed to shop for an appraiser who knows the area.

They aren't allowed to shop for price on an appraisal - hence the increase in appraisal costs.

They aren't allowed to shop for an appraiser who can do it quickly.

As a matter of fact they aren't allowed to talk to the appraiser. You have to order appraisals from a 3rd party company which adds nothing but costs and time delays and are actually the companies that prompted the lawsuit that changed everything. Somehow the system that caused the problem is the only people that benefited.

No one is allowed to give the appraiser information about the house or the area. That's now a federal offense - they say you are trying to influence the appraisal. There's a 1500 man FBI taskforce that's recently been formed to investigate incidents of this type of subversive action.

Although if an appraiser asks, you are allowed to give them all that info.

Appraisals have been coming in based more upon area averages rather than actual values. People who actually care about and take care of their properties are the ones getting hit the hardest. The people who live like trailer trash are benefiting from the new system.

You can't order a 2nd appraisal to check out or dispute the first appraisal. As a matter of fact there isn't even a system in place to allow you to get info to the appraiser (that they might have missed) to dispute the appraisal. You have to prove appraiser incompetance, which is very difficult.

Some of the 3rd party AMCs (Appraisal Management Companies) will politely ask an appraiser to relook at data, but they don't have to do it.

And all this just begins to touch on the appraisal issues nowadays.

Monark192 a 2075 isn't exactly no appraisal, but it's the next best thing. I'm betting it was a low LTV and in a neighborhood that was performing very well?

^-----HVCC sucks monkey balls. I am so glad to be off the mortgage-originator trainwreck. Was nothing but one headache after another.

ST_ZX2 wrote: ^-----HVCC sucks monkey balls. I am so glad to be off the mortgage-originator trainwreck. Was nothing but one headache after another.

I've been doing it so long I don't know how to do anything else (37+ years)

carguy123 wrote:

ST_ZX2 wrote: ^-----HVCC sucks monkey balls. I am so glad to be off the mortgage-originator trainwreck. Was nothing but one headache after another.

I've been doing it so long I don't know how to do anything else (37+ years)

I did it from 2003 until last year... Was a fun ride, and maybe I'll get back on when things improve...but I don't see that happening anytime soon.

What is really cool is that people who were working prior to 1999 have an edge on everyone else. 1999 was the genesis of the mortgage mandated madness.

People who began 1999 or later don't have a clue of the old way to do things and so are at a serious disadvantage. We were just looking at loans for the year and found out that we had been able to close 100% of the loans we got that had been rejected by other companies. Mostly builder lenders or Big Banks. That basically means they shouldn't have been rejected in the first place.

In almost every case it was a fairly simply operation for us to document things a little more thoroughly and get an approval. The new guys didn't have a clue you could do this.

While we aren't operating at nearly our old capacities we are doing more business and better business than many of the other lenders in our area except the Quantity guys. You know the ones. They send out 16,835,038,222 letters and emails a week to try to find the suckers. And we just won't go there.

I worked for a small (2 guy), family-owned broker after starting that way and then going retail with GMAC and FHHL. Went full-circle back to brokering and did it until we were squeezed out of business by the new FHA audit regs. Did not want to do retail again...did not want to work for a (bank-owned) mega-broker either.

I agree though, that a lot of the people that were in the biz were very sloppy. I closed a large number of 'sloppy seconds' deals that were "can't-dos" or turn-downs elsewhere. I almost always processed my own deals (except when I was in retail)...and was much happier doing it that way because I knew it was done right. I closed 100% of my sign-ups (that did not back out due to things like blown inspections or blown HVCC appraisals) as a broker...and never lost a deal due to sloppy pre-qual'ing. The appraisal madness was the final straw for me.

15 years in for me - first as a banker and the last 10 as a broker. We never had our FHA mini eagle so the new FHA audit requirements that let us become a sponsored originator have been a huge boost.

I don't suppose either of you mortgage guys could do a refi in Illinois?

No, only in Texas

I've been in the mortgage biz since 2004. It's a good job, and my book of business is now mostly repeat clients I have a relationship with and their families and coworkers. So much more fun to work with that type of client than someone who doesn't know or trust you. The first couple years building those relationships was tough but now finding business isn't bad at all. Fortunately I steered clear of the sub prime stuff early on. I did get up to speed on FHA pretty early so as the higher LTV traditional stuff got harder I was ready to do that niche.

Monark, I haven't even seen a 2075 in probably nine months. The last big wave of business that I'm on the tail end of closing out was a bunch of refi's that we had just done 10-11 months ago and a few purchases from spring, so we were able to take advantage of the 12 month appraisal recert time period. How are you still at it as a broker? I was a broker for the first four years. We saw the writing on the wall and joined the mortgage banker we had been placing 90% of our loans with, keeping our team set up as our own business unit but under their roof. Then as the warehouse lines got harder to keep open we joined a small bank and it's be best I've had it in this business. We still sell all of our paper and have construction and seconds to offer as well. It's great.

petegossett wrote: I don't suppose either of you mortgage guys could do a refi in Illinois?

Pete, I can and do originate in Illinois. PM'ing you my contact info.

There you go, once again GRM is the answer to the question.

GRM FTW!