Re-fi Update in GA - Quicken question

[alw19]

Hello Loansafe forumites,

I need some advice on our options, including if a HARP re-fi is even possible for us. We make a very good living and are not struggling financially. We're fortunate. However, our home is very, very underwater. We're in Georgia. We purchased in 2006 (ouch) at $468K with about 8% down. Now our value is somewhere around $305K.

We have a first with Bank of America, 6.625%, $339K balance. We have a second with GMAC, 7.8%, $53K balance. So we owe about $390K. Total LTV around 128%, maybe a bit less if an appraisal came in higher.

Total monthly payment around $3300 for both. Our loans are owned by Freddie Mac, they were sold to them back in 2006, so we meet that guideline.

I called B of A and we weren't eligible according to them after I gave all of our financial info. Here is my first question: do you have to demonstrate a financial need in order to get HARP?

I then called Quicken, and they want to speak to me after March 19th, which is when HARP 2.0 rolls out.

We want to do this for a few reasons: 1. We have young children and I'd like to scale back my work to part-time. 2. We are simply not getting anywhere paying down our mortgage at this interest rate. With property values continuing to fall in GA and our rate being so high, it feels like we're pouring $$ into a bottomless pit.

Right now, our excess cash per month is around $2000-$2500 after all bills are paid, including spending. We have that much to save each month. This goes to fund retirement (primarily), to our emergency fund, vacations, etc.

Are people who don't have extreme financial hardship eligible for HARP?

[alw19]

And... I just called B of A back to add to my application and they have no record that I made application for HARP re-fi? Apparently I spoke to the wrong person? This is just f**kery.

[Cat Damiano]

Hi alw19,


What is the reason that BofA stated you were not eligible?

The eligibility for the program is:

In general, borrowers must meet the following criteria:

• The mortgage must be owned or guaranteed by Freddie Mac or Fannie Mae.
• The mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009.
• The mortgage cannot have been refinanced under HARP previously unless it is a Fannie Mae loan that was refinanced under HARP from March-May, 2009.
• The current loan-to-value (LTV) ratio must be greater than 80%.
• The borrower must be current on the mortgage at the time of the refinance, with no late payment in the past six months and no more than one late payment in the past 12 months.

[bingoman]

"Are people who don't have extreme financial hardship eligible for HARP?"

You do not have to show financial hardship, nor do you have to go to your current lender to secure a HARP refi. You may find it difficult to complete the HARP refi, given you have a 2nd mortgage. I paid off mine (much lower amount) to complete my refi.

[Erik Sandstrom]

Bank of America should have given you a reason why you were ineligible, however that's not surprising if they did not. Freddie Mac's system sometimes will come back with an code of "Caution" or similar feedback which prevents us from moving forward with the loan.

You don't have to demonstrate a financial hardship, the HARP Refinance has a similar proceedure as a conventional loan. You must qualify based on debt to income, FICO score...etc. I have run into files where the borrower has great income, great credit and still receives a negative feedback through AUS (Automated Underwriting System). It almost seems that it could be they don't like the area or it's a high risk to lend in certain counties. We will know more after the release of HARP2 coming in about 10 days.

[alw19]

Thanks to all. Yes, I understand that any new lender has to get GMAC to subordinate. Unfortunately, paying off the second isn't really possible right now. It's $53K and it would take us about 2-3 years to do so. This isn't a problem if B of A is willing to refi since a rate adjustment would merely be a modification of the existing security deed of record.

I kept calling BofA until I got someone who was more knowledgeable. She stated that it sounds as if they sent my initial call to modifications and not refinance. We are eligible for HARP, but we're in queue to speak with a loan officer. Apparently call volumes are so high that you may have to wait 30-60 days just to apply.

Lesson: if you don't like the answer, just keep calling until you get an answer you like better.

[Cat Damiano]

This is true, but also because some of the previous restrictions are being lifted so that would allow more eligible homeowners to refi as well, which is clogging the system.

[Erik Sandstrom]

Bank of America taking 30-60 days just to apply for HARP...OH MY! I've heard something similar with Citi that they are waiting until April to start processing HARP applications outside of their own portfolio. I usually process my applications in 8-24 business hours depending on volume.

[alw19]

Erik, the rep on the phone said it will probably take a lot less. She actually quoted me 60-90 days (!!!) but said it will probably be inside 30 (but don't quote her on that).

We are going to proceed with getting quotes from other lenders. I remain hopeful that GMAC will subordinate, though I'm not 100% positive. Who knows what they'll do on any given day? I've read that GMAC is very pro-HARP. I may just call and ask if they are subordinating.

[Erik Sandstrom]

You should have no problem with the GMAC sub - i've already done a few through them and havent had any problems. The only one that's been an issue so far is Bank of America. If you want a quote from me, please don't hesitate to ask.

[andthen]

i'm doing the same with BofA. I really don't want to stay with them. I'm looking into Quicken Loans and Suntrust. Any thoughts on them for doing HARP? Any other lender I should start sending paperwork in and see who comes up with the best deals, seems like this will take months so might as well apply with different lenders.

[alw19]

Hi Everyone,

I posted a few days ago and got good responses. I have more info now. I have received a quote from Quicken, who is obviously very aggressive in their tactics on HARP loans. I've done some research into this company and there are obviously complaints, but here's what I now know:

We are eligible for HARP, we are looking to re-fi a $339K mortgage currently at 6.625%. Q offered 4.5% which drops our monthly payment by $650(!!). Credit (FICO) north of 750. Closing fees will run us somewhere around $3500, so we will recoup those costs in about 5-6 months. We will likely have to wait for HARP 2.0 to roll out on Monday as our LTV is slightly north of 125%. We don't want to walk away because: 1. we don't need to move, and 2. we make a good living, and I feel certain we'd be a prime candidate for our lender to seek a deficiency against (GA is not a non-recourse state, lenders have 30 days post-foreclosure to file a confirmation action and seek deficiency).

I am certainly going to shop around some, though I feel our options are limited simply because of how far our value has fallen. We've had a few neighbors who've had to move to relocate to a different state, and they dumped their houses for about 55% of what they paid. Any input on QL? I apologize if this is not the right forum for discussing specific lenders. Please let me know if I am out of line and I'll remove that part of my post.