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
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.
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