Investment Properties in Louisiana

[TrappedInRealEstate]

Hello loansafe.org community:

I'd love to hear from others who are trying to refi and/or otherwise deal with their investment property loans.

*I've already bounced this off of Erik and sadly he does not handle the state of Louisiana. He was very helpful and quick to reply.*

I have 10 units with 10 loans. Mostly Fannie, some Freddie. Serviced by Citi (4) Chase (5) Wells Fargo (1)

Earlier this year Chase indicated they could do HARP refi's for me (only would agree to on the notes they serviced), but wanted to charge upfront fees for appraisals. No amount of jawboning by me would get the appraisal fees removed, but I did get them to waive one and half another. Chase indicated they could refi 4 of the 5 notes. I think the 4 were Freddie and Fannie and the straggler was something else - IndyMac? I'm not really sure.

I get the packets of new loan docs from Chase and my savings amounted to about 70 bucks a note. This is going from a 7% interest rate to market. They had tacked on points and fees that jacked the loan amount up to not make it worth-while, in my opinion. The sad thing is in six months I can request PMI removal and save around 50 bucks a note. The problem is - for my investments to perform, I'm going to need move savings than that. I really need a couple hundred off per note (which is what would happen if they used the current rates and did not tack on all the fees they are allowed to get away with)

Citi was worse. They would do HARP on the notes they serviced, but needed $700+ per note up front for an appraisal fee which would not be refundable if the notes did not go through. (Chase had agreed to refund if the notes did not go) No amount of jawboning over a period of 5 months would get them to budge on this. I did not even have them send paperwork.

Wells Fargo. They indicated they could only look into doing HARP refi's on the notes held by Fannie due to the number. I havent gone forward with them as I need to refi everything for this to work out for me.

My take on this is that as far as up front fees - the service banks have leeway to waive fees if they want - but some choose not to. Further, it appears to me that they have learned how to pack these HARP notes with all of the fees they can. They still stay "true" to HARP by being able to say they will offer a savings - but the savings is small, increases the note (in my case) by 5 years and increases the principal.

SO - Does anyone have a suggestion? I'm to the point where the only other avenue I can try is to stop making the payments and discuss modification with the appropriate departments. As it stands I haven't missed any payments and do not have access to certain areas within the service banks that can make these changes.

MY thought being that if HARP can't help me with ALL of my units, and/or if the upfront fees are such that I can not afford to pay - I have no incentive to keep up the payments. *Units are underwater by 10% to 20% easily given the current market conditions

I would love to hear HARP strategies I haven't tried, or other places to call.
OR I'd love to hear about any success people have had with the service banks once they stopped making payments on the investment properties.

The frustrating thing is everything would be dandy if these loans could be changed to current market without filler fees.

THANKS!

[Cat Damiano]

Hi Trapped,


Welcome to the forum and thank you for joining............

Here is a recent scenario from a member to look through their thread and see what others are doing in a similar situation here;

How to Deal With Rentals

As far as the HARP refi, you can try contacting lenders specific to LA that deal with HARP here;

Home Affordable Refinance Lenders for Louisiana - Freddie Mac

[TrappedInRealEstate]

From what I'm gathering, doing a HARP refi with over 4 investment properties has restrictions.


SO - it seems like in certain scenarios you can be stuck with your current lender assuming that they have opted into this voluntary version of HARP in which you have over four units.

Hence, Chase and Citi have me over the barrel - head. I need to refi all of my units to set things straight. To do this I have to go through them.

At the present time they want to throw fees at me like fresh snow on the Rockies. This is the reward for digging into savings to keep up with the payments and stay HARP eligible.

Unless anyone has a suggestion - from what I'm gathering - my only other option is to just throw up my hands and quit sending payments. A gamble. They will either modify my terms to get to where I need, or they will get to have the properties back (and I'll get to have a Bk on my record - which I don't really give a rats ass at this stage)

Anyone have other thoughts?

Thanks in advance.

[Cat Damiano]

The member whos link I provided in my post can let you know what their strategy has been.

[TrappedInRealEstate]

Thanks Cat. It appears that the member GoingBrokeFast, who you linked to, made the decision to stop paying and to force the banks to retake the properties.

I have performing properties that - if the interest rates were adjusted to market - I could continue to operate until the loans were paid off. They are not at underwater levels experienced by GoingBrokeFast.

If any members have experience wrangling modifications from these banks on investment properties I would love tips. I was hoping that there would be tips on how to convince these banks to refi to an interest rate that will work - BUT - it seems to me that the setup as it exists for investors with over four properties (which include Freddie loans) you are forced to go to the Freddie service bank and beg for the HARP loan. Then that bank will tell you they can do it - and splash big time appraisal fees, points, and extend the loan while saving far from what they could have.

But hey - they just got a bunch of fees, and paid for doing it on the other side through HARP - so yay for them, they extracted all they could from the homeowner under the mantra of helping a HARP loan go through. They are helping! Nope. So far they are not.

Any pointers from the community are appreciated!

Thanks!

[GoingBrokeFast]

I saw no point in trying to modify the loans. they were too far underwater and now with the drastic decline in the area, were not worth keeping even if there were no mortgages at all. The issue for me was simply getting out while i had some assets left. When you have real estate with little or no income from each building and and located in a blighted neighborhood, it is time to cut your losses. I too am being forced to bk and do not care. it will be a relief to have someone else deal with loser tenants