How to Avoid Mortgage Refinance Runaround

by Cathy R. from Castroville, CA and by Jason C. from San Jose, CA

Ask Kate how to avoid the mortgage refinance runaround: Cathy has been trying to refinance her mortgage for almost 3 months. Even though she cooperates with her lender and pays for rate lock extensions, she experiences delays upon delays. The stress is making her sick so she asks me for help. Jason's requests to refinance have been turned down 12 times. Why doesn't he qualify, he asks me.


Ask Kate: Is it Ethical for a Mortgage Lender to Delay My Refinance

By Cathy R. from Castroville, CA

Is it Ethical for the Mortgage Lender to Delay My Refinance

On Oct 23 2015, we applied to refinance at Wells Fargo, our current loan is with Bank of America.

We want to consolidate and free up about $1200 a month.

We have turned over all requested documents. Loan rate was locked in, then the delays!

More documentation wanted, we provided it.

Updated documents wanted, we provided it.

Loan rate extended with a cost and credit for this however every time updated lenders cost sheet was sent (5 by now) somehow they keep showing more in payoffs and no end in sight. We paid $550 for the appraisal which shows $500,00 home value and we are only asking for $100,000.

So I guess my questions is, just how long can they keep delaying this and give us the run around?

The stress is literally making me sick to my stomach. Of course interest rates are up and we will lose the $550 if we just walk away. How legal and/or ethical is this? What else can we do?

***zz-portrait-left.shtml*** Kate's Answer: Is it Ethical for the Mortgage Lender to Delay My Refinance

Hi Cathy,

I get the feeling that you are a patient person until you've been pushed into a corner.

Then you say enough's enough!

I would agree. The bank has taken enough of your time and their delays have cost you money.

Meet Your Mortgage Lender Face to Face

Hopefully, you can go into the office locally because I think this is the quickest way to get action. Don't go in on a Friday when everyone is in a hurry to start the weekend. I'd pop in on Monday morning at 8:00 am with a stack of documentation in your arms.

Create a timeline of the mortgage process. On it, document dates to illustrate delays, the amount of money that you've given them, and the number of loan estimates with differing numbers. Show when you were asked for paperwork and when you delivered it to keep them from blaming you for their delays.

Be prepared with your demands, although I would not use that word. Even so, you need to let them know what you are requiring of them. As for yourself, know how much you are willing to compromise. This will help you negotiate more effectively.

It never hurts to visit their website ahead of time to learn the managers' names and faces. Then you'll know if you've truly met with a person of authority. And it goes without saying, any promises must be put in writing, signed, and dated.

The Cost of Interest Rate Lock Extensions

But I'd like to know why you paid to extend the lock if, as it seems in your letter, the bank is the cause of the delay? Or why they would not refund you the lock extension fee should you decide to go back to Chase or shop for another lender.

As I told Anna from New Jersey, don't sit back and accept the lender's actions as fate when they act all-knowing and all-powerful. Someone could be covering up a mistake at your expense. Read the rest of my answer to Anna at Mortgage Rate Lock Talk.

Don't Be Afraid to Lodge Refinance Complaints

If you are not satisfied with the outcome of your meeting, you have the right to go to government representatives with your story. Even the press.

File a complaint: Using the timeline you created for your meeting with the bank and backing it up with documentation, you can go to the Consumer Financial Protection Bureau as well as contact the other authorities in this list. ***zzz-link-write-reps.shtml*** Go public: Secondly, get help from the press by telling your story.

Enlist Representation: Lastly, read how a pro bono attorney helped stop predatory lending practices after Tom wrote me asking how to get assistance at... Predatory Lending Laws and Lender Paid MI.

Best wishes and please let me know how it turns out for you,


Ask Kate: Why Don't I Qualify to Refinance my Home Loan

By Jason C. from San Jose, CA

Why Don't I Qualify to Refinance my Home Loan
Dear Kate,

I requested Bank of America to modify my loan more than 12 times since 2012, each time was not qualified.

The following is my current status each month:
Total Gross Income: $4,500
Total Overtime: $500
Current Home Value: $720,000
Current Mortgage Balance: $465,000
Property Tax: $700
Home Insurance: $52
Credit Score: 740

Please help me to find out, why did not qualify for refinance and to modify the loan? What do I need to do?

Thank you for your help!

***zz-portrait-left.shtml*** Kate's Answer: Why Don't I Qualify to Refinance my Home Loan

Hi Jason,

By law, lending institutions must supply in writing why they will not lend you money. If you've been denied mortgage loan approval a dozen times, you need to take the denial notices and go through them to get to the bottom of this.

Then make an appointment with your mortgage loan consultant to go over the specifics together, looking for solutions.

After that, if you have questions regarding the lender's decisions, please feel free to write me back.

How to Shop for Mortgage Lenders

If you decide you need a new bank to refinance your mortgage, you'll find help at... Should I Refinance My Home But Switch Lenders by Debbie in Palm Harbor, FL and by Sally in New Albany, IN who both felt pushed by their banks.

Best wishes,

P.S. You mentioned a modification near the end of your letter. If you are trying to modify your loan, you can only use your loan servicer. Here's some help for that too... How to Untangle a HAMP Mortgage Modification Offer.

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