Ask Kate about 1st and 2nd mortgage problems - Title Alert! Hi Kate, I have been working with a Major Bank to refinance my home loan using the HARP (Home Affordable Refinance Program).
Two weeks before closing I was informed that the my second mortgage ($31,000 with a lesser known mortgage company) is now the first mortgage and my loan with Major Bank of $331,000 is now the second.
Apparently when I refinanced with Major Bank in January 2007, it took the title-closing company 6 months to file the appropriate paperwork.
In April 2007, I took out a 2nd mortgage on my home to finish my basement and the second filed their paperwork in June 2007, one month before Major Bank submitted its paperwork. Now the "system" has the mortgage company for the 2nd as the primary and Major Bank as the second.
Major Bank told me that they would get their legal team involved and get this matter rectified. It has been 7 months and nothing has changed. What can I do to get the $331,000 loan in a position to qualify for the HARP?
Kate Answers: Mortgage Problems
***zz-portrait-left.shtml*** Dear Kevin, If it wasn't so disturbing, I'd smirk at the absurdity. Of all the things a homeowner has to be concerned with during the mortgage process, recording should not be one.
Yet, here you are with a first mortgage turned into a second mortgage due to lag time in recording.
Mortgage Problems - Can't They Get It Straight?
What a hassle for you. Not only will the 2nd lien holder have to concentrate on this long enough to agree to going back into second position, the 1st lien holder, Major Bank, will not allow you to refinance until they can be assured of returning to their rightful position in the chain of title.
Mortgage Problems Compound For HARP
And then because you are refinancing under the Home Affordable Refinance Program (HARP), there is another layer of concern. Here is what HARP says about second mortgages.
"As long as the amount due on the first lien mortgage is less than 125 percent of the value of the property, homeowners with more than one mortgage may be eligible for a refinance under HARP. The lender that has your junior lien mortgage must agree to remain in a junior lien position."
Options To Solve Mortgage Problems
So what's the solution? As I see it, you have a couple of options.
1. If you don't mind how long it takes, wait until your file rises to the top of Major Bank's to-do list. This could possibly take weeks, months or years. Use the squeaky wheel method to draw attention to your plight.
2. Check your paperwork from the refinance with Major Bank to learn which company insured your title. Contact the title insurance company to get this straightened out. Here is where you could enlist the help of your mortgage professional handling your HARP application.
3. Hire an attorney. I don't like saying this anymore than you like hearing it. After all, why should the cost of fixing these 1st and 2nd mortgage problems be your responsibility?
Your Home And Your Mortgage (Problems)
In spite of sounding like a broken record (boy that's an outdated saying), I'll bring it up once more. It is YOUR home and YOUR mortgage. No one will look out for them as well as you.
So bookmark my website and return often for a fresh outlook on getting your best mortgage rate. Which in case you hadn't yet noticed, getting your best mortgage rate is about much more than saving an eighth of a point on an interest rate.
You'll find more answers to questions from other homeowners' experiences with HARP, HAMP, Loan Modification, Short Sale, and Strategic Default
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