Denied by Fannie Mae DU for reason of "credit enhancements", any help here?

[Tee-Dub]

My wife and I are getting very frustrated. On the surface we are qualified for the new HARP 2.0. Loan with Fannie Mae prior to 2009, we have LPMI, but have been told the company we have will transfer the certificate, my wife and I are at the same jobs for over 15 years, make more money than when we bought the house in 2007, credit scores in the high 700's, no missed payments, etc. Everything looked good, mortgage broker tells me it wont go through the DU system. She is on hold for 45 minutes one day, with no answer from Fannie Mae. Day two, after one hour on hold, she is told we don't qualify due to "credit enhancement" on our original loan. Only options are to re-fi with our current servicer, problem is they are Seterus (who are awful) and they don't originate, so they wont/can't re-fi our loan, or have it manually underwritten. Problem with that is finding someone who will do it. From what I understand there is more risk involved for the broker/bank. Are we simply stuck? We are at a 30 year fixed rate of 6.77% with 25 years left to go. We could re-fi to a 20 year loan at current rates and still save about $200 a month!

Has anyone else who has been denied for this reason had it overturned? Is there a way?

[Cat Damiano]

HI Tee-Dub,


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

The member in the following thread was denied for the same reason, there is contact information for Erik Sandstrom in the thread. He has been helping members with their questions about HARP here on the forum and may be able to answer your question whether or not it is still possible to refi.

Fannie Mae Finally Confirms Why My HARP2 Was Denied

[Tee-Dub]

Yeah, I've been in contact with Erik already and he didn't offer me much advice, other than get my current servicer to re-fi the loan, which isn't an option since Seterus doesn't originate.

[Cat Damiano]

He was probably referring to having whomever you are having the issue with to re-run the loan as he had suggested to the other member who is having the same trouble.

[Tee-Dub]

He suggested that, running it for a shorter term or disclosing more assets. After that failed he suggested having our current servicer do the loan as our only option. Or, find someone who will manually underwrite the loan.

We were using a different company and she said the way her system was set up to use the HARP 2.0 with over 125% LTV she could only run it as a 30 year. She fudged the numbers to show us a lower LTV and tried running it at 20 years and still got the same denial from fannie.

My wife put in a call to Fannie last week to find out exactly what the "credit enhancement" was that excluded us and what, if anything, we could do. She was told they'd call her back. After almost 48 hours she called back and was basically told, "don't call us we'll call you" with an answer. I'm not holding my breath.

[Dlarruso]

Good Luck Tee-Dub, As was mentioned in my previous thread we were denied by two lenders and finally found out the same thing that you did. We were able to elevate it up through Fannie Mae and was eventually told that there was nothing more that can be done. Let us know if you hear differently.

[Tee-Dub]

I imagine it will be the same story for us. Honesty and paying your bills on time doesn't account for much these days I guess.

[Angels]

I imagine it will be the same story for us. Honesty and paying your bills on time doesn't account for much these days I guess.

Nope. the banks only care about making sure they can collect money from their "cusomers" with as little risk as possible. no matter your history with them.

[ThaDunn]

My wife and I are getting very frustrated. On the surface we are qualified for the new HARP 2.0. Loan with Fannie Mae prior to 2009, we have LPMI, but have been told the company we have will transfer the certificate, my wife and I are at the same jobs for over 15 years, make more money than when we bought the house in 2007, credit scores in the high 700's, no missed payments, etc. Everything looked good, mortgage broker tells me it wont go through the DU system. She is on hold for 45 minutes one day, with no answer from Fannie Mae. Day two, after one hour on hold, she is told we don't qualify due to "credit enhancement" on our original loan. Only options are to re-fi with our current servicer, problem is they are Seterus (who are awful) and they don't originate, so they wont/can't re-fi our loan, or have it manually underwritten. Problem with that is finding someone who will do it. From what I understand there is more risk involved for the broker/bank. Are we simply stuck? We are at a 30 year fixed rate of 6.77% with 25 years left to go. We could re-fi to a 20 year loan at current rates and still save about $200 a month!

Has anyone else who has been denied for this reason had it overturned? Is there a way?

My wife and I are in the same boat as you, we also have "SETERUS," Seterus gave us the same line and directed us to Quicken, we contacted Quicken, Quicken told us to wait after March 17th and to call back. After the 17th we called back and guess what no go, we shopped around with 2 other lenders, same story we don't qualify through their DU. The last lending company was really nice and was sorry and he didn't understand why we weren't qualifying even after fudging the numbers.

We live in Ca., we puchased our home in 2005, never have been late on payments, our loan is about 198K, its valued around 160K, I make over 90K, have 760 FICO, and normal consumer debt., It seems this HARP program was to good to be true for us hard working Americans. How can you find out if our loan has this "credit enhacement," which disqualifies us from HARP. Hope there is a light at the end of the tunnel and that there is someone that can help us. Thanks.

[Tee-Dub]

The person we were working with at Windermere Mortgage spent and hour and forty five minutes on hold with fannie to finally get the "credit enhancement" decline. We called fannie mae last week and heard nothing. My wife called them 2 days later and was basically told, "don't call us we'll call you". They called her back today, of course on her office phone, but we're on vacation all this week. The only number they left on the message was the generic consumer number for Fannie, so my wife called that back and had to basically go through the whole thing again just to leave a different call back number to find out the exact reason we were declined. From what I've been reading, "credit enhancements" are insurance policies placed on pools of loans sold to fannie to protect them, and the investor, but to leave us, the consumer, out to dry. Basically, it is something that was tacked on to your loan after closing that you have no control over. What aggravates the hell out of me is we aren't asking for any hand outs here. We aren't walking away from our home, we aren't asking to be absolved of any of the debt. Only to get today's interest rate that in our case, would save us $150,000 in interest over the life of our loan. That is $150,000 that would go right back into the economy. My own little "trickle up" theory, since we know "trickle down" is a farce.

[Erik Sandstrom]

Hi Everyone,
Thought I would chime in here as I'm sure many people are experiencing the same difficulties even I have a few clients in the same position. As we know the Fannie Mae /Freddie Mac System is very Risk oriented. I've seen the system react differently in certain scenarios. I strongly believe that the automated underwriting system has some demographic foreclosure variant built into the system which will create the additional risk depending on the foreclosure rate of underwater borrowers in your area.

For some of my homeowners experiencing difficulties passing the automated underwriting system I will be re-running in a few weeks in hope that there will be updates to the program.

I'm also expanding my portfolio of people that can help HARP borrowers and I have found a lender that will manually underwrite the EA-1-3 (Expanded approvals) in California. Outside of California at this time unfortunately I don't have a contact.

[Erik Sandstrom]

ThaDunn,
Shoot me over your contact information and I would be more than happy to put you in touch with the person I know that can help.

[ThaDunn]

Erik,
Thanks for the help, I sent you an e-mail. Let me know if you need anymore info.

[Tee-Dub]

Thanks for all your help Erik, keep us posted! From what I understand, someone who manually underwrites this vs. using the DU system is at a higher liability risk, is that correct? How does that affect the loan, both terms, rate, and requirements to qualify?

[Angels]

The person we were working with at Windermere Mortgage spent and hour and forty five minutes on hold with fannie to finally get the "credit enhancement" decline. We called fannie mae last week and heard nothing. My wife called them 2 days later and was basically told, "don't call us we'll call you". They called her back today, of course on her office phone, but we're on vacation all this week. The only number they left on the message was the generic consumer number for Fannie, so my wife called that back and had to basically go through the whole thing again just to leave a different call back number to find out the exact reason we were declined. From what I've been reading, "credit enhancements" are insurance policies placed on pools of loans sold to fannie to protect them, and the investor, but to leave us, the consumer, out to dry. Basically, it is something that was tacked on to your loan after closing that you have no control over. What aggravates the hell out of me is we aren't asking for any hand outs here. We aren't walking away from our home, we aren't asking to be absolved of any of the debt. Only to get today's interest rate that in our case, would save us $150,000 in interest over the life of our loan. That is $150,000 that would go right back into the economy. My own little "trickle up" theory, since we know "trickle down" is a farce.

The majority of the interest paid to the banks is built into the first 5 years of payments. But as far as the full 150K goes, the bank would rather have their hands on it then let it go into the economy or your own personal savings.

[Tee-Dub]

We are at 6.77%. If we could re-fi to 4.5% and to a 20 or 25 year term (we have 25 left on our current) we would cut $150,000 from what are currently paying over the next 25.

[samething]

I could have written this scenario myself. It is exactly what we are experiencing. As a result of the "credit incentive" applied to our original loan - Low Down Payment PMI - we are finding out that only our current mortgage service provider (PHH, sold to by TDBank) is able to refinance for us. The best rate they are offering is 5.66 unless we want to buy points. We could bring $9,000 to the table or roll it into the new loan, of course, putting us even further behind the eight ball. I contacted Federal Housing Finance Agency Consumer Help for information regarding this issue. They only referred me to Fannie Mae. Calling Fannie Mae for information was useless. In fact, the person I spoke to (John #860) was quite rude. It doesn't look like we will be able to take advantage of the HARP2 program at this point. Very disappointed.

[Harptwoisajoke]

Newbie here! I thought I'd start with sharing my HARP2 horror story. The good: A borrower, good income, stable job, never missed a payment....the ideal Harp2 candidate? FNMA thinks not...because of something I didn't do.

Seems I'm in the same boat here. I've been going back and forth between FNMA and Seterus since March 19th after my DU REFI Plus was denied because my loan was ineligible. I wasn't sure why until today. I went to two lenders, one being my employer and another broker; both had the same result. But it was the broker that was able to provide me this from FNMA.

"Charter: The existing Fannie Mae loan is not in the DU Refi Plus database because it is subject to a form a credit enhancement that remains ineligible. Existing loans are ineligible for the DU Refi Plus refinance option in cases when these mortgage insurance policies or agreements are necessary to meet Fannie Mae minimum credit enhancement requirements applicable to loans in excess of 80% LTV. Refer the lender to the Selling Guide for additional information. If the borrower needs the Refi Plus flexibilities, they may contact their existing servicer and the existing servicer may then contact their Fannie Mae representative to determine if there are potential options for ineligible existing mortgages.

I called FNMA because I knew what Seterus was going to say and I didn't want to call FNMA because I knew what they were going to say. But I marched on. I feel they (FNMASETERUS) basically know me by name. I was FINALLY transferred to "Mario" who told me I had credit enhancement on my loan, but could not tell me what type or how to have it removed/resolved. He only offered to recommend that I contact Seterus to research options. Mario obviously wasn't listening. He also suggested that I contact my lender. Um. I don't think I have a lender anymore. I think I have an investor and I think the name of that investor is FNMA. Mario was not happy that I was persistent in my pursuit of a solution and well, I guess we had a bad connection....or Mario grew tired of logic.

So here I sit, with a mortgage of $223,000 at 7.125% and Zillow says $113,000. I feel like the Walking Dead.

[Tee-Dub]

Yeah, seems the exact same scenario we're in except we owe almost double what you do. I was referred to Clay Selland of Signet Mortgage as someone who can possibly help. They have our application and have what he calls a "trouble ticket" in with Fannie to find out what is happening. I really don't have any hope at this point, although Clay seems confident he can get further than the last person we used. Fingers crossed, but not expecting much here.

[Erik Sandstrom]

Welcome to the forum,

What you're experiencing is something that is happening across the board, if you're not able to be helped right now - I wouldnt be surprised if that changes. There's updates coming through which may allow your loan to be eligible, don't lose hope.

I do have a question, when you originally financed your loan, was it above 80%? If it was, some lenders attached what was called "Self Serviced" mortgage insurance. Many of these were the old Countrywide loans, now held by Bank of America, or in many unfortunate circumstances sold off to servicers that don't originate. These self serviced mortgage insurance policies are unable to be transferred to a new loan because they were never really attached to a mortgage insurance provider.

Now...I'm not able to help those scenarios, but I am able to finance loans with Mortgage Insurance. If you have Mortgage insurance on the old loan, the new loan will have the same policy and coverage. I have a list of MI providers that are willing to transfer the certificate.

Whatever happens, I do hope it's the best for you and your family.

[boricua65]

My question is why the frack does Fannie Mae offer something they won't deliver? I was watching CSPAN the other day Edward DeMarco (from FHFA who took over Fannie and Freddie) talking about mortgage forebearance vs mortgage forgiveness. From I what I can tell, FHFA could care less about what is happening.

[jblackwell]

Well, I've ended up here in order to stay up to date with news, and possibly gain information from others in our situation. I think since I'm new to this forum, I should give a brief introduction/history...

My wife and I purchased our 1st home in Feb. 2007, looking back, it was possibly the worst time ever to buy a home. I just separated from the USMC the year prior, and just started my career in law enforcement in 2006. At the time my wife was working as a server at a high end restaurant (actually making about the same as me, in tips alone). Applied for a mortgage and was told that yes our credit scores were very good, but could not get a decent interest rate, and could only get 7.525%. We were told the interest would be high because I was in a new line of work (not yet established and secure) and my wife did not have reliable income (due to being earnings from tips). The loan agent told us it wasn't a big deal. She said just take the 100% financed, 30 year fixed at 7.525%, interest only for first 5 years loan, then refinance after 2 years to a lower interest rate. We said okay, we'll make due for 2 years. Of course the real estate market crashes months after we close on our home... Fast forward 2 years...

We made attempts to refinance, no luck. Tried loan modification, no luck. Tried some of the early making homes affordable government plans, still no luck. The reasons for all of our denials were because we made too much money (lol!).

This past month was the end of our 5 years of interest only, and our mortgage has jumped $200+, and now we're drowning even faster than before. Recentley tried to participate in HARP 2.0, at the recommendation of our crappy servicer "Seterus". We were intially told by everyone that we are perfect candidates, until they ran everything and discovered CREDIT ENHANCEMENT! No luck again, and no hope in the near future. We have been told by some that "Seterus" is our only hope, they would have to modify. That is another joke because I think anyone who has Seterus knows that they are unwilling to help anyone. So, what now? We've been told of a possible update to HARP 2.0 later this week that may address the newly discovered credi enhancement issue, I say newly discovered because it seemed like many of the lenders I called didn't even understand it. Or wait til the fall, which is when another HARP 2.0 update is said to occur, and may address those with credit enhancements on their Fannie Mae loan.

General info:

Income: approx. $80k between me and my wife.
Credit scores: both over 750 (may have reduces due to lender inquiries)
Loan balance: $228k, Home value: approx. $193k
Payment history: Perfect, never missed or late on any.

So, if anyone has any ideas, recommendations, or updates we are open to any and all. Any help would be greatly appreciated.

Thanks,
Joel

[Erik Sandstrom]

Well, I've ended up here in order to stay up to date with news, and possibly gain information from others in our situation. I think since I'm new to this forum, I should give a brief introduction/history...

My wife and I purchased our 1st home in Feb. 2007, looking back, it was possibly the worst time ever to buy a home. I just separated from the USMC the year prior, and just started my career in law enforcement in 2006. At the time my wife was working as a server at a high end restaurant (actually making about the same as me, in tips alone). Applied for a mortgage and was told that yes our credit scores were very good, but could not get a decent interest rate, and could only get 7.525%. We were told the interest would be high because I was in a new line of work (not yet established and secure) and my wife did not have reliable income (due to being earnings from tips). The loan agent told us it wasn't a big deal. She said just take the 100% financed, 30 year fixed at 7.525%, interest only for first 5 years loan, then refinance after 2 years to a lower interest rate. We said okay, we'll make due for 2 years. Of course the real estate market crashes months after we close on our home... Fast forward 2 years...

We made attempts to refinance, no luck. Tried loan modification, no luck. Tried some of the early making homes affordable government plans, still no luck. The reasons for all of our denials were because we made too much money (lol!).

This past month was the end of our 5 years of interest only, and our mortgage has jumped $200+, and now we're drowning even faster than before. Recentley tried to participate in HARP 2.0, at the recommendation of our crappy servicer "Seterus". We were intially told by everyone that we are perfect candidates, until they ran everything and discovered CREDIT ENHANCEMENT! No luck again, and no hope in the near future. We have been told by some that "Seterus" is our only hope, they would have to modify. That is another joke because I think anyone who has Seterus knows that they are unwilling to help anyone. So, what now? We've been told of a possible update to HARP 2.0 later this week that may address the newly discovered credi enhancement issue, I say newly discovered because it seemed like many of the lenders I called didn't even understand it. Or wait til the fall, which is when another HARP 2.0 update is said to occur, and may address those with credit enhancements on their Fannie Mae loan.

General info:

Income: approx. $80k between me and my wife.
Credit scores: both over 750 (may have reduces due to lender inquiries)
Loan balance: $228k, Home value: approx. $193k
Payment history: Perfect, never missed or late on any.

So, if anyone has any ideas, recommendations, or updates we are open to any and all. Any help would be greatly appreciated.

Thanks,
Joel

Hi Joel,
Welcome to the forum and sorry to hear about your unfortunate set of circumstances. I'm a licensed loan officer and would not mind taking a look at your file and running it through the automated underwriting system to see exactly what it's saying. I'm guessing this is the mortgage insurance and the current lender isnt financing loans with MI, this "Credit Enhancement" terminology is being thrown around a lot with Fannie & Freddie.

When we run the automated underwriting system (AUS) it will tell us if you're able to be approved for financing or why it's not being approved. There's also things that can be done at times to get the loan to approve, ie: shortening the term or paying off debt.

Feel free to get in touch with me when you have a free moment.

[still ineligible]

I seem to be in the same situation. Deemed ineligible to refi under HARP 2.0, though I meet all the advertised eligibility guidelines, when the lender's Desktop Underwriter program kicked out an error message. No one can tell me what it is about my loan that renders it ineligible, though the term "credit enhancement" has been thrown around. Current servicer is Seterus. I've now spent several hours on the phone with Fannie Mae and Seterus and have sent a written request to Seterus for more information on my loan. Though I'm sure I already know the answer, I'm going to do as suggested by the level 2 Fannie Mae rep I spoke with last week and contact Seterus again to request that someone there contact Fannie Mae "for information about options for refinancing" though I already know that no one at Seterus is going to do that.

I can't understand the reasoning for Fannie Mae disqualifying all loans with credit enhancements attached. My loan is now a seasoned loan (5 years in) with perfect payment history. Shouldn't that signficantly reduce the level of risk associated with the refi?

I would appreciate any information about lenders willing to do a manual underwrite on these types of loans. I am in VA.

[Tee-Dub]

Yeah, good luck with Seterus. Main problem is (other than how they do business) is they are a servicer only, they don't originate, so they can't re-finance your loan. My wife spent a half hour on the phone with a rep from Seterus (after getting disconnected twice) two weeks ago. We were promised a call back the next day, it never came. We have been playing phone tag with Fannie Mae and keep missing the call back. They don't leave a direct dial number of any higher level help, so when we call back it is as if we are starting all over again.

Our situations sound very similar, Seterus, 5 years on the loan, no missed payments in that time, stable jobs and income yadda yadda yadda.

[LoanModHelpCenter.com]

Its amazing these guys at Seterus and Fannie Mae make it so hard to refinance under HARP 2.0 even with the mortgage insurance which should make refinancing easier since the insurance is there to protect against default.

fannie and freddie should be trying really hard to help homeowners who are current and dropping this credit enhancement rule from stopping a HARP refinance.

Any homeowner paying on their mortgage that is upside down and has no equity, is doing the investor of the loan a favor by paying on time and should be rewarded with the best rates available out there which are currently 2% and 40 year amortization, fixed for 5 years with a ceiling rate of today's Freddie Mac PMMS rate through a mod program called HAMP, but which requires a proven "hardship" which is unfair to those who don't have a hardship and are paying on time.

I personally dislike it when homeowners apply for a loan mod when they can't get refinanced and they have to jump through hoops to prove a hardship to get a payment of 31% of their gross income as the modified payment.

They should be making it so easy for everyone on here to get the same benefits as those getting a loan mod with a hardship.

The issues I see are the differences between Fannie, Freddie and Making Home Affordable.

Fannie and Freddie don't "like" Treasury nor being told what to do by the Treasury or anyone else all thanks to Ed DeMarco, the acting director of FHFA the Fannie and Freddie Regulator.

Here is Mary Miller, Under Secretary for Domestic Finance in the Treasury Department, in her written speech to the National Council of State Housing Agencies this past Monday:

“We have also asked FHFA to allow the GSEs to participate in the principal reduction alternative of the Home Affordable Modification Program known as HAMP. ... Given the large percentage of outstanding mortgages that are currently backed by Fannie or Freddie, it is important that the GSEs participate in this program.” Calling principal reduction a useful tool, Miller said in “some targeted cases, principal reduction makes economic sense for both the homeowner and the lender – helping reduce investor losses and preventable foreclosures over the long term.”

[Tee-Dub]

Just heard back and still at square one. Basically stonewalled by Fannie Mae and simply told our loan doesn't qualify due to credit enhancement, nothing more. He is telling me I don't have LPMI or PMI though and the first mortgage guy we tried using said we had LPMI. I'm so sick of the run around here, not to mention getting shut down by Fannie for some bogus reason. I guess the wait continues. Hopefully they'll try to fix the bugs in the system, but I'm not confident in getting any relief for our situation. Something tells me they'd rather find reasons not to help. Why cut my interest rate when that just means less money for them. I'm gonna go sit in a corner now and bang my head against the wall.

[LoanModHelpCenter.com]

Just heard back and still at square one. Basically stonewalled by Fannie Mae and simply told our loan doesn't qualify due to credit enhancement, nothing more. He is telling me I don't have LPMI or PMI though and the first mortgage guy we tried using said we had LPMI. I'm so sick of the run around here, not to mention getting shut down by Fannie for some bogus reason. I guess the wait continues. Hopefully they'll try to fix the bugs in the system, but I'm not confident in getting any relief for our situation. Something tells me they'd rather find reasons not to help. Why cut my interest rate when that just means less money for them. I'm gonna go sit in a corner now and bang my head against the wall.

Tee-Dub - the issue with LPMI is the lender is paying the mortgage insurance and now mortgage insurance is higher than it was when the lender insured the loan at origination.

the lender is the block here because they see home prices wobbly at best or slightly appreciating in some markets while the majority of markets are going down in home value.

By refinancing the loan under HARP, there is probably a clause that the insurance has to get met to allow the refinance to go through and that probably costs the lender/servicer more money than they want to spend.

I'm guessing the servicer/lender should ask for more money from Treasury for these types of loans so that more HARP 2.0 refinances can get done and the insurance/servicer/lender is taken care of.

[Tee-Dub]

Now I've had one lender tell me I had LPMI, the last lender and Seterus, our servicer both told us we don't have LPMI. So, I don't know what to believe. All I know is both lenders told us we were denied due to "credit enhancement" on our original loan by the Fannie Mae DU system.

[gena ensey]

We have the same problem, after trying 3 brokers we finally found out that the loan has "enhancements" which I presume is the credit enhancement. We have LTV of 174% and an 8% mortgage serviced by Seterus. We have no choice but to keep paying on time as I hear horror stories of trying to get a modification or interest rate reduction from Seterus. Does anyone think this Harp rule may change in the future?

[LoanModHelpCenter.com]

I was doing some more research on what is going on here on this thread as it pertains to what is causing the failure to go through on HARP 2.0 as Erik Sandstrom is a trusted expert we turn to for mortgage banking advice and thought I would try to help.

here is a link to the guide on Fannie Mae HARP from March 15, 2012:

https://www.efanniemae.com/sf/mha/mh...inancefaqs.pdf

since serterus was not the originating lender who paid for the credit enhancement (term for mortgage insurance, starts on page 15) the following questions pertain to what is going on.

since serterus doesn't do originations, they have no mechanism for continuing coverage when the new HARP 2.0 has been refinanced.

from what i understand from reading this, its like all serterus loans with original LPMI and still with LTV at 80% or higher are screwed and out of luck because Serterus doesn't do LPMI and they took on the loans for servicing only, not refinancing.

there is some chatter in the press about work on the way from MHA and Treasury to make this easier for new lenders to refinance but since Serterus doesn't provide LPMI when they take on these loans from the previous servicer, they are not going to be able to get any of their clients to do HARP 2.0.

Q47.
In connection with the refinance of loans that are already insured, how can lenders effect transfer of existing MI coverage to the new loan, given that many servicer systems are set up to cancel MI coverage on loans that are paid off?


Lenders/servicers must continue to work closely with their MI providers to either continue existing coverage or obtain new coverage on new refinance loans and not allow erroneous cancellation of coverage when existing loans pay off. The lender that originates the refinance will be held responsible if the MI coverage on the existing loan is not successfully continued on the new loan, either by modification of the existing MI certificate or by issuance of a new MI certificate.


Since March 2009, the MI companies have made significant progress in supporting both same-servicer and different-servicer refinances. With respect to same-servicer refinances, all of the major MIs have issued guidelines to facilitate these refinances via modification of the existing MI certificate.


In addition, the MIs have implemented processes to facilitate both same- and different-servicer refinances and to help avoid the erroneous cancellation of coverage. Lenders are encouraged to review the MI guidelines, consult with their MI providers, and use their best efforts to obtain MI coverage that provides the lowest-cost option available to the borrower within the overall context of improving the borrower’s position.

Q48.
If the borrower is refinancing with a different servicer, does Fannie Mae allow the MI company to charge a modification fee to transfer the MI certificate?


Fannie Mae does not object to an MI company charging a reasonable fee to transfer the certificate, and will allow such cost to be rolled into the unpaid balance of the new loan as a closing cost as long as the loan will still comply with Fannie Mae’s and the MI company’s guidelines.


Q52.Are existing loans with MI coverage provided by Triad, RMIC, PMI, or any other MI that at the time of the refinance is not eligible to write new business eligible for refinance under this initiative?


Yes. While these MI companies have been prohibited by their respective state insurance regulators from insuring any new risk, they are permitted to modify the terms of existing risk as long as the loan complies with their published guidelines, improves the position of the borrower, and decreases the likelihood of default and of the MI company having to pay a claim. Note that if any MI company fails to pay a properly payable claim (or any part of a properly payable claim) solely because it does not have the financial ability to pay, that risk belongs to Fannie Mae, not the lender.

[jblackwell]

I can actually say that I pretty much never use this term,but OMG! I was literally in the middle of typing a reply about my frustrations with Seterus, and possibly about to start missing payments in order to qualify for a hardship loan modification. I had about two paragraphs done when my phone rings, it was Quicken Loans, the rep I’ve talked to before. The rep immediately told me she had good news. As of May 1^st there are some changes, from my understanding approved by Seterus, to help those that did not qualify for Harp 2.0 because of a credit enhancement. I’m not sure if it’s all the Seterus customers in this situation, or just a few, she said our name was on a list of a couple thousand customers. I also asked if this is something other lenders will be able to do, and she told me no (something about Seterus and Quicken working together or something). At this point I’m not even very interested in shopping around to see if anyone else can, I just want to be done. She basically told me everything will happen tomorrow when she gives me a call to complete everything. She said that we will qualify for the lowest current rates, and that we will close in 2-3 weeks, and be in a new mortgage by the end of May. I am hoping for the best, and will let everyone know what happened afterward. I hope others on this site get some good news too. If you have Seterus, and haven’t already done so, I would definitely recommend calling Quicken (probably by today, because she said it will be a madhouse tomorrow). Good Luck!>

[Dlarruso]

JBlackwell - Thanks for the information. Our loan is serviced by Seterusso we will contact them and hopefully they will get us transferred to Quicken Loans, and we can start the process with them. It will be interesting to see if whatever agreement quicken and seterus have can overcome this "credit enhancement" problem many of us have hit a brick wall with.

Also - I thought I read somewhere on this forum that Quicken has capped LTV at 95% even though HARP 2 has no cap. Has anyone heard different?

[Tee-Dub]

Thought I read Quicken wouldn't do over 105% LTV. We're currently at about 155% LTV :-(

[jblackwell]

Quick update... Just got another call from Quicken. She told me there is a slight delay in the launch of this program. They will not begin until next Monday, 5/7, because they are making sure all legal issues are in order. She reassured me that it will definitley still be happening, even with the 1 week delay.

As for the LTV cap with Quicken, I'm not sure what applies anymore. Ours is now around 118%, but she says we're fine, so we'll see.

[Tee-Dub]

Keep us posted. How did you go about it? Did you contact Seterus and get set up with Quicken or did you just contact Quicken directly? I had heard that they had capped their LTV in spite of the looser federal guidelines. Would be curious for someone else to chime in here if they know anything.

[Tee-Dub]

Just spoke to "Nathan" at Quicken loans. He didn't seem to have any knowledge of problems with "credit enhancement" for Seterus customers and was eager to take my application. Having already applied with two other mortgage companies in the last couple of months I think I'm going to hold off until we know something definite about how Quicken is working with Seterus customers. He did tell me they have a 125% cap with appraisal waiver. I told him we were at about 150% but he didn't seem to think that mattered. Not sure about that one. Think I'd rather speak to someone at Seterus first and see if they know anything about working with Quicken.

[Coues]

Im new to this forum but have been following everyones issues for some time. It sounds like I am in the same situation as most of you and am receiving the same responses from lenders. I am told that I am inelegible for the Du Refi Plus option and that the only person that is able to refi this property is my current servicer. I have been told that the only way to refi my property was by getting it Manually underwritten. B/S!! My currrent servicer is ****terus and we all know that they do not originate. My credit scores are in the high 700's and I have never missed a payment or been late on a payment. My property was bought and became a Fannie Mae product in May of 2006. Everything on the surface says I am elegible for this program (HARP2.0).

I have been on and off the phone with multiple lenders, Seterus and Fannie Mae trying to make some sense of all this. It seems like all i get from the above stated is the runaround and one person passing the buck onto the other.

So after reading todays posts I decide to call Seterus and find out if they are aware of any resolution that is in effect between them and Quicken loans regarding loans that were deemed ineligible due to credit enhancements? After being on hold with the Representative and him trying to get answers for me he finally transfered me after 45 minutes and I spoke with Patty Cunningham in the" delinquent managements department" and she stated that the Credit Enhancements that were placed on our loans were placed by Fannie Mae and are showing a pending transaction on our credit reports. She stated that these credit enhancements are raising red flags when the lenders are attempting to process our Refi's through the DU Refi Plus system. She told me that she was filling out a form that would remove this so called credit enhancement and would make my loan appear "Eligible". She stated that this would take 3-4 weeks to generate and update itself and when it reflects on my credit report that I would be able to refi.


Hopefully this helps and I will update thsi thread as I receive new information.

[Tee-Dub]

"Coues" I forwarded your post to my wife (who has been attempting to deal with this since I don't have the patience) and she called Seterus, again. After getting disconnected the first time (this happens almost every time we call them) she gets someone that is somewhat helpful. The first person said they had no record of my wife calling about this subject three weeks ago, before disconnecting her. The second person said she could in fact see in their records that she had called and to whom she'd spoken to. She asked for "Patty Cunningham" this time and was told she couldn't speak to her because their system doesn't allow people to ask for a specific person, unless there is a record in their file that they have in fact already spoken to that person! She then told my wife that she wasn't aware of any sort of problem with "Credit Enhancements" and Seterus customers. After a half hour on the phone she told my wife she saw no sign of credit enhancement on our loan, but she would find out and call us tomorrow (this is what we were told three weeks ago by the last person, who never called back). Before ending the conversation, she told my wife, "but to do a Harp refi you can't be late on your payments". My wife said, "and we aren't". The rep then said, "oh, you're right, you haven't been late, it looks here like you're actually "pre-qualified". Pre qualified for what? We can't refi through Seterus because they don't originate, so what the hell are we "pre-qualified" for? Seterus' headquarters is about a half hour from us, I'm about ready to go over and start the fire bombings.

[Tee-Dub]

Hey, guess what, today came and went and not a single call from Seterus, as was promised. Go figure. Checking out the Better Business Bureau and seeing that Seterus currently has an "F" rating with them doesn't surprise me I guess.