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.


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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. Please Help!


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Kate Answers: HARP Refinance Made Impossible

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.

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 bookmark HARP Refinance Made Impossible to your favorites and visit often for more refinancing tips. You can also invite friends to comment on HARP Refinance Made Impossible or ask another question of their own like you did.

Best Wishes,

Ask Kate
Kate Ford




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The information you obtain at this site is not, nor is it intended to be, a substitute for financial, real estate or legal advice. You should consult an attorney, accountant, lender or real estate agent, as applicable, for advice regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com

Comments for
HARP Refinance Made Impossible

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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

The information you obtain at this site is not, nor is it intended to be, a substitute for financial, real estate or legal advice. You should consult an attorney, accountant, lender or real estate agent, as applicable, for advice regarding your individual situation. Comments and opinions found here are not necessarily those of Get-Your-Best-Mortgage-Rate.com

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