National Lenders Botch HARP 2 Refinance Loans

by Nancy in Mesa, Arizona and by Marie in Peoria, Arizona

Ask Kate about national lenders who are botching HARP 2.0 refinance loans: I'm at a loss for words and that takes a lot for me! Refinancing a mortgage with the HARP 2 program should not be this difficult. Meet Nancy and Marie, both Arizona homeowners, with questions about their frustrating experiences with Wells Fargo and Bank of America while attempting to participate in the Making Home Affordable Program (MHA).


Question 1: HAMP Modification, Hardest Hit Fund Program (HHF), and HARP 2 Refinance

By Nancy in Mesa, AZ

Hi Kate: Does the HAMP exclude us from HARP 2.0 participation?

HARP 2 Refinance Help
We were drug through the mud with Wells Fargo for 10 months. After 3 no's, we got a yes for HAMP.

But by the time they got around to it, the interest rate went up, and the 2% and Principal Reduction never materialized.

We have had a permanent HAMP for 2.5 years now, that gives 3.75% for the first 5 years and then moves to 4.375% for the other 25 years.

Our fixed income is going to be reduced $1000 a month in a year. Our state of Arizona has a Hardest Hit Funds (HHF) program, where they will reduce Principal to current values. HARP 2.0 was not available to us when we did the HAMP.

Our house is worth about $200K, and we still owe $248k. We want to do the State Program, where in conjunction with a HARP 2.0 Refinancing, they will reduce the principal up to $100,000. This would finally give us the reasonable and affordable payment we should have had when we first bought this house in 2007 for over $350,000.

We have no 2nds or HELOCs, but we also have very little money, lots of medical debt, no car loans. We do have income to qualify for a $200,000 loan.

We were shocked when they approved us for $320,000 back in 2007, because we knew on our fixed income we would NOT be able to support those payments. 'Don't worry,' Wells Fargo said, 'you will be fine.'

Our current situation is we are spending $200 to $300 more per month than we take in. This HHF Program would solve our problem once and for all.

I told Wells Fargo at the time that we needed to reduce our payments to $1100 a month including property taxes and insurance but we ended up at $1500 a month.

I verified with Freddie Mac that our HAMP does not exclude us from HARP 2.0, but they said had we done HARP it would have. But Wells Fargo insists it is a Freddie Mac rule that after HAMP, HARP 2 is not possible.

Freddie said we could go Open Access to another lender if Wells refuses. Thanks, we love your information and helpfulness.

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Ask Kate answers: HAMP Modification, Hardest Hit Fund Program (HHF), and HARP 2 Refinance

Hi Nancy,

It makes me so happy to know you are finding help at Get Your Best Mortgage Rate.

Whew, what a mess. There's so much that Wells Fargo could have avoided that spiraled into this mess.

First let's talk about affordable house payments. Your experience backs up what I've always maintained. Many banks don't give a hoot whether or not you can afford a mortgage payment. Okay moving on! Homeowners are allowed to modify their mortgage with the HAMP loan program and still be eligible to refinance afterward with HARP if the hardship has been resolved. But lenders are resisting the notion.
Freddie Mac is also correct that a mortgage is eligible only once to be refinanced under the HARP program. But this must change. Go here for the scoop: January 2013 HARP 3 Petition Makes National Mortgage News.

Hardest Hit Fund Program

One of the big benefits under HARP 2 gives homeowners the right to shop lenders for their underwater refinances. So you do have that option.

However, you should also know that Hardest Hit Fund program can be done in conjunction with the Making Home Affordable Program but it can also be used as a stand-alone program. Look for more information at the azhousing.gov website. I should add, using HHF will require Wells Fargo's approval.

Best wishes,

Ask Kate

Question 2: Feel cheated! No help with HARP Refinance Program!

By Marie in Peoria, AZ

National Lenders Botch HARP 2 Refinance Loans
Kate, We were told we could refinance our home with the HARP 2 loan.

We pay over $3800 per month. Interest is at 7.5 percent. Our house is worth $300,000 less than what we paid. But when we went for the HARP loan, we were told we couldn't do it now.

Bank of America had the loan for 6 or 7 years but because Freddie Mac or Fanny Mae sold it to Well Fargo, we don't qualify!

When we purchased it we were told it was a Freddie Mac or Fanny Mae! Confused on how they can do this. How is it backed by our government, then they sell it and don't even tell you? Nor is it backed by the government now?

We were still paying BOA on time and we still are!

I believe Well Fargo bought the paper now. I asked them if it is still a Freddie or Fannie and they said no.

Did Fanny and Freddy sell some to get out of refinancing the loans? It really threw us out of the game! Even the banker was shocked!

Our credit is 715 and spouse 759 no late payments on home! Had two late payment at Kohl's. One was 30 days late. The payment was mailed however they never received it last year. Also one 4 years ago thirty day late. Closed account! That is all that was on credit report.

Could not get help on this home. Cannot get regular loan because we are upside down on it. Was told I would have to pay down the loan with $150,000 or more. Can't get HARP, streamline or anything.

I don't know why BOA can't refi it for us since we have had the loan with them for 6 or 7 years and never have been late! We still pay them for our loan? Have been with them 25 or 30 years! Help!

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Ask Kate answers: Feel cheated! No help with HARP Refinance Program!

Hi Marie,

What a mess! I'd give up on getting a straight story from Bank of America or Wells Fargo. Why not go straight to Fannie Mae or Freddie Mac to see if they do indeed back your mortgage.

For phone numbers to call Fannie and Freddie, go to Does Fannie Mae or Freddie Mac Own My Mortgage Loan.

Other homeowners have contacted me with similar questions. Study my answers at:
1. Fannie Mae Loan Lookup HARP Refinance Glitch where you'll meet Jennifer from Michigan. Her lender is claiming Jennifer's mortgage has never been backed by Fannie Mae.

2. HARP 2.0 Condo Financing Trouble where you will learn about meeting with Fannie Mae and Freddie Mac face-to-face.

3. Problems with Fannie Mae HARP 2 Loan Lookup where you learn how to solve loan look-up issues.

Best wishes,

Ask Kate

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