HARP 1st 2nd Mortgage Refinancing
by Joe from Portland, Oregon
Ask Kate about HARP 1st and 2nd Mortgage Refinancing Problems (Making Home Affordable Refinance Program): Hi Kate, We just got up to the approval phase of refinancing our Portland, OR home under HARP. We bought for $325K but now it is worth $250K, according to Zillow.
We have been working with a local bank on refinancing, and they just informed us that the new holder of the 2nd mortgage (about $45K) has refused subordination.
What options are open to us? Are there government bodies interested in this issue whom we can or should contact? Is there a way to play "hardball" with the new lender? Thanks for your thoughts, Joe
Kate Answers: HARP 1st 2nd Mortgage Refinancing Problems
It helps in playing hardball if homeowners have something the lender wants.
But a loss in equity due to a decline in real estate markets puts homeowners over a barrel. This can make negotiating HARP refis more difficult.
Your 1st Mortgage Lender Doesn't Want To Lose Your Business
Still, mortgage lenders do not want to lose their portfolio of loans (that means YOURS) to their lending competitors. In light of this, see if you can entice your primary lender handling your HARP refinance to further pursue the 2nd mortgage lien holder.
In other words, although you are not in the strongest position to negotiate when you owe as much or more than your home is worth, you are still a paying customer who is not defaulting on your mortgage.
You have the type of mortgage loan that lenders want to retain!
How To Crawl Inside Your Mortgage Lender's Head
HARP refis are similar to more traditional refinancing in that you have to crawl inside the lender's head and think like they think! ...because what they are NOT saying to you about your HARP refi may be more important than the response you received.
I have written an article on this that I think will be of help - how to request an alternative plan of action for Mortgage Approval.
Enlisting the Help of Division of Finance and Corporate Securities
One source of government help for homeowners is the governing body of finance on their state level. Do a search for Oregon.gov to find your state website. For Oregon, proceed to the Division of Finance and Corporate Securities (DFCS).
Make your request to the point. Clearly identify the problem and explain concisely why you do not feel you are being treated fairly. Include a simple way to contact you and any written communication between you and the 1st and 2nd mortgage holders.
As an alternative, you can climb the chain of command at your mortgage company until you locate someone willing to roll up their sleeves and help you obtain your 2nd mortgage subordination.
Remember, this is YOUR mortgage and no one will care more about your home than you. YOU are your best advocate.
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