How to Refinance a Mortgage when You Smell a Rat

by Carolyn from USA, by Susan from Ohio, and by Vickie from Michigan

How to refinance a mortgage when, like Carolyn, Susan, and Vickie, you begin to smell a rat. Carolyn received a phone call that VA loan guidelines changed 8 months after she closed her refinance. Now they want money from her. Susan's husband is being asked to sign a fictitious gift letter. Vickie is trying to refinance her 1900 farm house with HARP 2. But Fannie Mae insists she has manufactured home financing and wants her to pay for an appraisal.


Question 1: VA Loan Guidelines 8 Months after Refinancing a Mortgage

By Carolyn from USA

Hi, I'm having problems with my mortgage company 8 months after closing on a refinance. My payment record is perfect throughout my owning the house (12 1/2 yrs). The loan is VA backed and I have a letter dated 7-25-12 saying "Congratulations, I am pleased to tell you that VA has guaranteed the loan you obtained on your house".
Home Loan Help: How to Refinance a Mortgage when You Smell a Rat

The problem started about a month ago when I got a call from someone saying that I should have had an appraisal. I told them that I had closed months ago and that I was now in the process of remodeling and wasn't expecting to finish anytime soon.

I also voiced my displeasure that they were bugging me with their mess up.

I didn't receive another call until last week when the story turned into the VA not backing my loan because of the term and that it needed to be re-written without VA backing.

The guy said they would help me, like I should spend more money to fix some screw up they did and never said they were at fault. I don't know everything that is going on yet but I smell a rat somewhere. Any advice you can provide would be greatly appreciated! Thank you, Carolyn

***zz-portrait-left.shtml*** Ask Kate answers: VA Loan Guidelines 8 Months after Refinancing a Mortgage

Hi Carolyn,

Although I'm not sure who specifically is contacting you, I'd have to agree. I'm suspicious that I too smell a rat!

I would not try to solve this on your own. Call your local VA Regional Loan Center and ask them for advice and assistance in getting to the bottom of this nonsense.

There are 9 VA Regional Loan Centers. Go to, choose "Locations", and then scroll down to "Regional Loan Centers" to contact the office that services your state.

You can see where I gave similar information to another VA homeowner at Home Mortgage Help for Disabled Veterans.

Best wishes,


Question 2: Would You Sign a Fictitious Gift Letter

By Susan from Cincinnati, Ohio

Hi Kate- My stepdaughter is buying a home (has contract) but asked her dad to sign a gift letter. My husband told me he actually isn't giving her money, she just needed him to sign it. I think something fishy is going on.

Would you know any reason he would sign a gift letter without actually giving her money? I appreciate your answer! Thanks

***zz-portrait-left.shtml*** Ask Kate answers: Would You Sign a Fictitious Gift Letter

Hi Susan,

If the mortgage representative is requesting that you sign a gift letter without actually donating funds, not only might something be fishy, you could be asking for future trouble.

Under some circumstances, donors can be subject to gift tax by the IRS.

Your daughter should know that later in the transaction, you may be asked to provide bank statements and withdrawals slips to show you've transferred the cash. It would not be unusual for your daughter to be asked for a deposit slip showing receipt of the funds.

You may or may not get a straight answer if you call the loan rep directly and ask for the reason behind a fake gift letter. Call anyway!

And as long as you have him on the phone, why not ask for a better way to solve any loan approval issues. But your daughter may need a new loan professional! Go here for Ask Kate answers to shopping for mortgage lenders and comparing interest rates online.

Best wishes,


Question 3: Fannie Mae Manufactured Home Financing for Farm House

By Vickie S from Lapeer, Michigan

I am in the process of HARP refi and Fannie Mae records are incorrect. My Indymac mortgage lender told them their records are wrong. I sent a copy of home owners insurance with a letter from them stating it is a 1900 farm house.

The 2006 appraisal shows 1900 farm house (in writing) yet they are unwilling to change their records, demanding I get an appraisal to show the financing is upside down and that it's a 1900 farm house.

But what if they won't change their records and I will be wasting money? How can I get them to change their records?

***zz-portrait-left.shtml*** Ask Kate answers: Fannie Mae Manufactured Home Financing for Farm House

Hi Vickie,

I've heard about Fannie Mae and Freddie Mac entering wrong addresses at the time they back a mortgage or denying that they purchased the loan.

See Fannie Mae HARP 2 Loan Look-up and Fannie Mae Loan Look-up HARP Glitch for the experiences of Shawna from California and Jennifer from Michigan.

It rubs me the wrong way because these government sponsored entities, Fannie Mae and Freddie Mac, are such sticklers for correct information and will not hesitate to require that lenders buy back loans.

But I would not depend on your mortgage professional having enough time to adequately solve this. You can do it yourself! In fact, I told Jen from Colorado how to take care of a similar problem. Go to HARP 2 Condo Financing Trouble for 3 ways to contact Fannie Mae Mortgage Help Centers.

Best wishes,


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Problems with Our Closed Loan
by: Desila

We closed on a mortgage about a month ago. Now the bank is saying they can't get the loan funded because the appraisal was done on the wrong form. Can they make us refinance?

Hi Desila, Kate here...

Wouldn't it be refreshing if a lender would admit because they made a mistake that they would also take responsibility for fixing it. What happened to the adage, 'The customer is always right!'

I can't say for sure what your signed loan documents committed you to. Read through them to see if you can locate any verbiage about required cooperation on your part after closing.

If the lender starts threatening you with a higher interest rate, get on the phone with a supervisor. This may be cover-up for not locking your rate properly. If someone with authority at the mortgage company does not bring you a resolution, you may need to consult an attorney.

Best wishes, Kate

P.S. I have answered other borrowers' letters who are also experiencing problems at National Lenders Botch HARP 2 Refinance Loans.

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You can also ask Kate about your mortgage at How to Find Your Mortgage Lender.

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