Refinance Approval Taking Too Long


LoanSafe Member
Jul 17, 2012
I have questions about my refinance options. We're almost at 60 days when the rate lock will expire. All the paperwork, appraisal are in - waiting on HUD to approve for a month now. Was told if application is denied, there would be no costs. If the rate lock expires, can I back out with no costs or do I have to accept an extension/new rate?

Goal of refinance: pay off charged off second and credit cards. I'm refinancing 70% of the home value.

The big hold up is a charged off second (more than 4 years ago) that I've been making payments on for a couple years. I skipped a couple payments 20 months ago while negotiating a new "payment plan." - nothing in writing but they are viewing those as missed payments. I was up front about all of this and they didn't think it would be a problem with more than 18 months of payments (especially since most people don't pay anything on a charged off second). -

The paperwork shows the appraisal and credit check are my responsibility, but the rep said they would pay those costs if the loan is not approved. - can this be true?

Also, how long can they keep me in limbo (credit wise) with closing on this loan? Is there a reasonable timeframe that they have to keep (90 days, etc.?) At what time point can I back out and not have to pay any fees (appraisal, etc.)

Thanks for any advice!

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
San Diego, California
There's many things that I find unfortunate in your circumstance and would want to know answers about. I myself am the resident loan officer here licensed in almost every state in the country and here is what I'm curious about.

1. Why is the loan locked for 60 days? How long have you been in the process currently?
A refinance shouldn't take longer than 30 days under a government or conventional loan unless borrower is delaying sending in supporting documents.
2. What are you waiting for as a response from HUD?
The lender you're working with is doing the loan and then selling it back to either Freddie/Fannie or another investor. HUD shouldn't be coming into the picture.
3. Your derogatory credit that was 20 months ago shouldn't matter, even with the loan being charged off (and 0 payments made after charge off) we have successfully refinanced a couple of our borrowers here at and they are happy to share there experience if you would like to speak with them.

Give me a call, something sounds really fishy about what you've mentioned above. 619-379-8999 or [email protected]
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