Harp 2.0 Refinance denied by Citibank

[aigabak]

Confused Homeowner: I was denied a Harp 2 refinance from Citibank for apparently no reason. Here is the backstory: We bought our first home 8 years ago for $173,000 and had a 7 year arm and a 7% interest rate with PMI on it. We refinanced to get a better rate and take some cash out during the bubble and now have a 30 year fixed with a 6% interest rate and owe $207,000. We do not have a second and we don't pay any PMI. At the time of the refinance, we still had $80,000 in equity. Then the crash happened. We had our 3rd child in December and needed more space so we bought a bigger home and are renting out the previous one. We have only been reluctant landlords for 5 months. We have to supplement our rental payment with $250.00 per month. I have really excellent credit and my husband has good credit due to being from another country and not having a lot of credit history. Our combined score is excellent. I called Quicken Loans and they said "Freddie Mac places your home value at $148,000 so you have a LTV of 140% (roughly) and we won't do the loan. The officer told me that only Citibank would refinance us because that is our current servicer. I called Citibank and they very promptly, with no credit check or application said no. They placed the home value at $168,000 - based on what - I do not no. Which places our LTV at 123%. When asked why we could not do Harp she very quickly would talk over me and tell me I couldn't have Harp but I could do a Loan Motification. I told her I didn't want a loan mod I just wanted the Harp program. She said no again and when I asked why she just kept saying she didn't know why but the answer was no and I should stop asking her for details and start talking about the other options. I told her I wasn't interested in the other options and finally nailed her down into telling me that "Freddie Mac denied you - I don't know why and I could send you an application but the answer would still be no." Finally after many questions she said that Freddie Mac slowly releases new homes approved for the Harp 2 every two weeks or so and our home was not on the list yet but I could check back in a couple of weeks. Again, no other reason - nothing I could do to speed the process. She then heavily pushed for a loan mod instead. Which I told her we would have to get back to her on. My question is - is Citibank lying? Why is Freddie Mac denying the refi? How would she know without an application? And is Quicken lying? They are saying that my home is worth far less than Citibank and claiming that that number came from Fredie mac. How can I get the Harp 2 refi? It seems we are perfect candidates but I can't get anyone to offer it.

[aigabak]

Update: Also told by Citibank rep that there is no way to contact Freddie Mac. She said there is no phone number - no way to find out why the refi has been denied. Any help would be greatly appreciated.

[LindaMax]

Confused Homeowner: I was denied a Harp 2 refinance from Citibank for apparently no reason. Here is the backstory: We bought our first home 8 years ago for $173,000 and had a 7 year arm and a 7% interest rate with PMI on it. We refinanced to get a better rate and take some cash out during the bubble and now have a 30 year fixed with a 6% interest rate and owe $207,000. We do not have a second and we don't pay any PMI. At the time of the refinance, we still had $80,000 in equity. Then the crash happened. We had our 3rd child in December and needed more space so we bought a bigger home and are renting out the previous one. We have only been reluctant landlords for 5 months. We have to supplement our rental payment with $250.00 per month. I have really excellent credit and my husband has good credit due to being from another country and not having a lot of credit history. Our combined score is excellent. I called Quicken Loans and they said "Freddie Mac places your home value at $148,000 so you have a LTV of 140% (roughly) and we won't do the loan. The officer told me that only Citibank would refinance us because that is our current servicer. I called Citibank and they very promptly, with no credit check or application said no. They placed the home value at $168,000 - based on what - I do not no. Which places our LTV at 123%. When asked why we could not do Harp she very quickly would talk over me and tell me I couldn't have Harp but I could do a Loan Motification. I told her I didn't want a loan mod I just wanted the Harp program. She said no again and when I asked why she just kept saying she didn't know why but the answer was no and I should stop asking her for details and start talking about the other options. I told her I wasn't interested in the other options and finally nailed her down into telling me that "Freddie Mac denied you - I don't know why and I could send you an application but the answer would still be no." Finally after many questions she said that Freddie Mac slowly releases new homes approved for the Harp 2 every two weeks or so and our home was not on the list yet but I could check back in a couple of weeks. Again, no other reason - nothing I could do to speed the process. She then heavily pushed for a loan mod instead. Which I told her we would have to get back to her on. My question is - is Citibank lying? Why is Freddie Mac denying the refi? How would she know without an application? And is Quicken lying? They are saying that my home is worth far less than Citibank and claiming that that number came from Fredie mac. How can I get the Harp 2 refi? It seems we are perfect candidates but I can't get anyone to offer it.

We got all the way the through the approval process for the HARP 2.0 with a local mortgage company -- we have excellent 800 credit scores, no late payments, current 6 7/8% first of $345,00, appraised at $275,000 2nd home condo which we've had to rent out now. Everything looked perfect. A drop down to 4.75%, costs under $4K. Then Freddie Mac said, No. They didn't like the ratio of commercial space to homeowner space in the building. Even though it is unchanged since we purchased the condo 5 years ago. Even though it is an upscale mixed use building in upscale area of upscale Pasadena. Even though THEY ALREADY OWN THE LOAN, so the only thing that would change would be a lowering of our interest rate -- and the bank's profit. Ah hah, a clue.

[Erik Sandstrom]

Confused Homeowner: I was denied a Harp 2 refinance from Citibank for apparently no reason. Here is the backstory: We bought our first home 8 years ago for $173,000 and had a 7 year arm and a 7% interest rate with PMI on it. We refinanced to get a better rate and take some cash out during the bubble and now have a 30 year fixed with a 6% interest rate and owe $207,000. We do not have a second and we don't pay any PMI. At the time of the refinance, we still had $80,000 in equity. Then the crash happened. We had our 3rd child in December and needed more space so we bought a bigger home and are renting out the previous one. We have only been reluctant landlords for 5 months. We have to supplement our rental payment with $250.00 per month. I have really excellent credit and my husband has good credit due to being from another country and not having a lot of credit history. Our combined score is excellent. I called Quicken Loans and they said "Freddie Mac places your home value at $148,000 so you have a LTV of 140% (roughly) and we won't do the loan. The officer told me that only Citibank would refinance us because that is our current servicer. I called Citibank and they very promptly, with no credit check or application said no. They placed the home value at $168,000 - based on what - I do not no. Which places our LTV at 123%. When asked why we could not do Harp she very quickly would talk over me and tell me I couldn't have Harp but I could do a Loan Motification. I told her I didn't want a loan mod I just wanted the Harp program. She said no again and when I asked why she just kept saying she didn't know why but the answer was no and I should stop asking her for details and start talking about the other options. I told her I wasn't interested in the other options and finally nailed her down into telling me that "Freddie Mac denied you - I don't know why and I could send you an application but the answer would still be no." Finally after many questions she said that Freddie Mac slowly releases new homes approved for the Harp 2 every two weeks or so and our home was not on the list yet but I could check back in a couple of weeks. Again, no other reason - nothing I could do to speed the process. She then heavily pushed for a loan mod instead. Which I told her we would have to get back to her on. My question is - is Citibank lying? Why is Freddie Mac denying the refi? How would she know without an application? And is Quicken lying? They are saying that my home is worth far less than Citibank and claiming that that number came from Fredie mac. How can I get the Harp 2 refi? It seems we are perfect candidates but I can't get anyone to offer it.

Sorry to hear about what you've been through with these other lenders! Here's what I understand of it so far.

Freddie Mac HARP 123% LTV
LA: 206,000.00 - 30yr/F @ 6%
Good credit, I'm assuming good income
One thing we wouldnt be able to do is use the rental income unless you're a seasoned landlord on another property (renting for 12+ months). So the liability on your rental and your primary would have to be considered.

This sounds like a great scenario I would be willing to take a look at! Even if the LTV was above 125% I've been receiving many approvals from Freddie and if we get a denial I know a few things that can possibly overturn that.

Citibank and Quciken may not be lying, they most likely don't know what to do. Now I do know that Citibank and Quicken have LTV limits currently and have been dragging their feet with releasing the unlimited program which we offer. Many of the large lenders must be either overwhelmed or hesitant to offer the program.

[Erik Sandstrom]

LindaMax,
I've never heard of such a thing, are you sure it's not an internal guideline with the lender you're working with?

Is this something that was determined through automated underwriting? This sounds VERY strange.