HARP Refinance Made Impossible

by Joe from Massachusetts, USA

Regarding HARP refinance Made Impossible: Dear Kate, I contacted my lender (Major Lender #1) who holds my first mortgage on April 8th about refinancing. I qualified for the HARP refinance program through Fannie Mae. I was approved May 1st. Because I have a 2nd mortgage with another lender (Major Lender Two), I need to get a letter of subordination.



The subordination was submitted May 29th by Major Lender #1. When I contacted Major Lender Two to find out how long the process would take, I was originally told 15 to 20 days.

After a week I called to check on the status and was told due to a high backlog it could now take up to 75 calendar days. Major Lender Number One has been kind enough to extend my rate lock which was up June 15th but how long they will keep doing this is unclear.

My question is, How does Major Lender Number Two expect anyone to close a loan if the typical lock period is 60 days and is there a statue of limitations of time. What can I do to move things along?

I am hearing a lot of people having the same problem. How does the new administration expect people to take advantage of these new programs if the banks are conducting business this way.

Important! Don't miss out. The HARP Refinance Program through Making Home Affordable ends on December 31, 2016.

Kate Answers: HARP Refinance Made Impossible

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Dear Joe, While I don't have a direct line of communication with the White House, I sure wish I did!

First of all, for Readers unsure of the significance, here's a brief 101 on subordination. The order in which mortgages are recorded in public records is of utmost importance to a lender. So second mortgage holders are usually required to provide written agreement to remain in second position or the homeowner cannot refinance. This agreement is called a Subordination Agreement.

Doesn't sound THAT complicated, does it? But squeezing that agreement out of a second mortgage holder can feel as challenging as trying to move Mount Rushmore. I hear you asking why!

The second mortgage lender has little to gain and in many instances much to lose by subordinating to a new first mortgage. I'm not saying the homeowner does not stand to profit from the refinance, just that the lenders look at this whole picture differently than we homeowners do.

Solution? If you have a lender representative, enlist their help in obtaining the subordination agreement. Many times a mortgage rep has inside contacts that could help expedite the process.
Ask Kate about HARP 2.0 Loan
Refinancing got you down? Ask Kate about HARP!
But in the end, nothing is going to work as well as the squeaky wheel. S-Q-U-E-A-K! Squeak politely but squeak insistently. Lenders have laid off personnel and stripped down departments. Those who ask the most for help will be the first to receive.

Expect to make getting the subordination agreement your project. Call for status during early hours even if it means you have to set your alarm to get up in the same time zone as the lender. Make a log of conversations including names, phone numbers, email addresses, time, date and what was discussed.

Since you also mentioned that you were concerned about your interest rate, I have provided links to tips on locking mortgage rates below for your convenience. After reading through them, please let me know if you have any questions.

Take a moment to save HARP Refinance Made Impossible in your favorites and visit often for more refinancing tips. You can also invite friends to add a comment (see link at the bottom of the page) or ask a question of their own.

Best wishes,

Ask Kate

Finding Help for Locking Rates

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Get mortgage broker fees in writing or your rate lock is meaningless!

How good is a mortgage interest rate lock guarantee?

Yield Spread Premium is a common reason for losing your rate lock.

Questions to ask before you lock.

Search questions and answers at Ask Kate Mortgage Rate Lock Center I.

More questions and answers at Ask Kate Mortgage Rate Lock Center II.


Comments for HARP Refinance Made Impossible.

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Refinancing, Appraisals, and HARP
by: GW

We were told by our nationwide mortgage lender who bought our loan from another company we could do a HARP over a year ago. It took 4 months to complete, we recently were looking at doing it again but told we couldn't.

So we tried the refinancing route through the our loan servicer as they were sending us solicitations via mail every week. Well after we got our Appraisal back I almost fell off my chair, as the appraiser de-valued our home by $168,000.

This is after we stuck in about $160,000 in upgrades. It appraised just before the home market crashed for $493,000.

I told the Lender, that the Appraiser didn't even use similar comps and that our house is unique to our area, similar homes 4 blocks away are selling for 500-600K. Now they are telling me to wait and do another HARP loan.

I mean I understand they over-valued houses just before the crash of the home market, but now there under-valuing them and a lot of people who need these refinances can't do them. Thanks for any input!

Kate here. Yes, with the exception of a couple of years, these major lenders with their own in-house appraisal teams were famous for low-balling property values, especially when a house was not a cookie-cutter.

I personally experienced this before the crash. So I did my research and presented the bank with comparable properties and asked for a reconsideration. They refused to adjust the appraised value but agreed to lend me the original loan amount at the identical rate.

Weird! But this was before the collapse of the financial institutions.

However, you could still try it. Here's what you'd need to do. Find 3-5 similar properties (lot size, style, and square feet) that sold during the last 3-4 months in your neighborhood or a similar one nearby.

Write a letter requesting an appraisal review based on the new information you found. Include as many details as you can, even a map pinpointing the locations, number of bedrooms and baths, addresses, date of sale, etc. You never know, the bank may bend. I hope so and wish you the best of luck! Kate

How To Find Lenders Participating in HARP
by: Gina Pogol

Freddie Mac has a list of Home Affordable Refinance Lenders.

Note from Kate: Thanks Gina for pointing out this out.

For a list of lenders participating in Home Affordable Refinance Program (HARP) for borrowers with Freddie Mac-Owned Mortgages, go to Does Fannie Mae or Freddie Mac Own My Mortgage.

The partial list includes phone numbers.

HARP Refinancing Question
by: Bil

I have single loan (95%) Interest Only, no second loan, no PMI. I owe 325,00, my property value is 265,000 which is about 122 percent loan to value. I never missed a payment and my credit score is 750 plus. Do you know if any lender can refinance program under HARP?

Hi Bill,

Here is what the HARP website says someone MAY be eligible for HARP if they:

Own a one to four unit home that is a primary residence

Have a mortgage owned or guaranteed by Fannie Mae or Freddie Mac

Are current on mortgage payments and have not been more than 30 days late making a payment within the past 12 months

Have a first mortgage not exceeding 125 percent of the current market value of the home

Have income sufficient to support the new mortgage payments

Can improve the long-term affordability or stability of the loan with the refinance.

Sounds to me like they are trying to describe you. Have you been turned down for HARP?

Kate

HARP Useless
by: Anonymous

We tried several times with a large bank who has bank in their name, and the paper work was requested 6 times, yes 6 times. All we want is to reduce our 6.25% interest. Then I get notified by HOPE that I have no hope of getting a HARP. While this was not an Obam problem but a left over from the Bush days if you can pay your bills you will remain underwater on your home mortgage. Sad, that someone needs to default on their mortgage to even be consider for anything. What a waste of my time, government time, bank time, and HOPE time.

Probably best to just let the bank have the home then it will become their problem.

Will HARP be touted as sucess by Admin during 2012 elections
by: Anonymous

I sure hope Mr. Obama touts that millions were helped by his administration via the HARP program. Conceptually sounds good. 3 basic requirements which many folks meet.

So what's the problem... can't find a bank that even has a clue what HARP is, they tend to confuse it with HAMP.

The other problem, PMI on your existing loan pretty much guarantees HARP is not an option.

Mr. President extended HARP from June 2010 to May 2011 thinking additional time was needed for individuals to take advantage of the program. I read where his administration estimated 10 to 12 million people would take advantage of HARP but through June 2010 only 150,000 had.

The issue is not more time for homeowners to become aware of the program. The issue his administration needs to address is the total apathy by Banks who do not want to deal with HARP and MI's who crush these loans because of how they view HARP.

Note from Kate: I hear often from frustrated homeowners regarding HARP and HAMP. Remember also to write your state and federal representatives.

Harp Impossible
by: Anonymous

I cannot refinance using HARP due to PMI insurance. Why?

From Kate -- PMI insurance allows a lender to approve a mortgage with less than required equity. When a private mortgage insurance company approves your application, it is actually insuring the lender for a percentage of loss if you were to quit making your payment.

Private mortgage insurance companies, be it for a HARP refinance or other program, have approval guidelines. They must have decided that your credit profile did not meet their guidelines.

Ask your lender if they would consider resubmitting your application to an alternate PMI company.

Start here for an insider's look at PMI: What Is PMI.

Thanks for writing, Kate

HARP / Freddie Mac Lenders?
by: Anonymous

Do you know where I can find a list of lenders approved by HARP and Freddie Mac to do HARP refinances? Like mine, some loans that are owned by Freddie Mac and serviced by a HARP approved lender can qualify for HARP.

I've wasted a lot of time calling around for good mortgage rates, only to find the lender doesn't do HARP loans. I did run across one lender that does HARP refinances, but I need to find others because I need to get a better interest rate. Thank you!

Answer From Kate

Dear Anonymous, I am not aware of a master list but I have written Compare Mortgage Rates And Lenders In Six Steps which can assist your search.

Because you need a lender who participates in HARP, make that the first question in your search.

Don't hesitate to write back with additional questions. Kate

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You can also ask Kate about your mortgage at Refinancing Advice The Nuts and Bolts.

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