Nonsensical Mortgage Refinance Practices

by Karol in Ohio, by Cheyll in Florida, and by Kurt in Georgia

Ask Kate about nonsensical mortgage loan refinance terms: Homeowners encounter poor training, fraudulent practices, and ignorant decision making as they attempt to refinance their mortgages. If you rode the mortgage rapids in the last six years, you can relate to Karol in Ohio whose refinance offer by her lender will raise her monthly payment.



Then there's Cheyll in Florida who after her husband died is given no options to HARP refinance her home, and Kurt in Georgia who can't trace the owner of his mortgage after it's been transferred multiple times.

Refinancing Raises My Mortgage Payment - Am I Missing Something?

By Karol in Franklin, Ohio
Refinancing Raises My Mortgage Payment - Am I Missing Something?

Hi Kate,

I currently have a 30 year mortgage ($92,000 at a fixed interest rate of 6.75%) that started in 1993. So I only have 10 years left to pay on it.

I also have a second mortgage, an equity flex in the amount of $35,000 at 3.9% interest rate.

My bank (5/3) keeps calling me telling me I should refinance with them and combine the two mortgages for a maximum of 10 years at 3.49%.

But when they figure this out, it comes to more per month than I am paying now for both. So I don't see the benefit for me only for them. Am I right or am I missing something?

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Ask Kate answers: Refinancing Raises My Mortgage Payment - Am I Missing Something?

Hi Karol,

Trust your gut! You are right for investigating.

Here's something to look at. Your 1st mortgage must be fully amortized, which means it will pay off in full, at the end of its term.

But what about your 2nd? Are you only paying interest charges? Will you eventually be slapped with a balloon payment in order to pay the loan off in full?

If so, this still isn't reason enough to refinance.

Ask your bank if you could you achieve the same result as refinancing with extra principal payments to the 2nd mortgage.

If the extra payment is no more than the difference between your current combined payments and the amount your payment would increase in the proposed refinance, you achieved the same goal without closing costs!

Read more about mortgage fees and Good Faith Estimates here.

Ask your bank to run the numbers for you. If they aren't interested in helping you determine whether refinancing is truly in your best interest... well you know what to do!

Best wishes for your refinance decision,

Ask Kate

Harp 2 Refinance Question

By Cheyll in Orlando
Harp 2 Refinance Question

Hi Kate:

I have just been turned down for a Harp loan due to the fact that my name is not on the original mortgage.

My husband is deceased and I do not know what else to do. Should I seek legal advice?

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Ask Kate answers: Harp 2 Refinance Question

Hi Cheyll,

Submit your marriage certificate and your deceased husband's death certificate to the lender. Add to that, detailed verification of having made the monthly payments. Then ask for a re-consideration.

If that doesn't work, yes, I suggest getting attorneys involved.

Read my answer to another homeowner with a similar situation at Mortgage Refinancing Tip for Adding Co-Borrower

Best wishes for refinancing,

Ask Kate

MERS Mortgage Transfers - Where's My Mortgage

By Kurt W. in Georgia
MERS Mortgage Transfers: Exposing Nonsensical Mortgage Refinance Practices

Hello, Kate, Here is my question, I bought a home in 2006 and was financed by Bayrock Mortgage. They went of business however they purportedly sold my Mortgage to Taylor Bean and Whittaker, who was shut down by the Feds in 2009 for Mortgage Fraud.

During that time mortgages were literally flying all over the place, some went to Bank Of America others went to different places. I finally found out that my mortgage was being serviced by Green Planet servicing company a debit collector, which got me thinking as to where the original note and deed were?

So I stopped paying as I felt my mortgage had been securitized and no one could produce any original paperwork, just copies from Mortgage Electronic Registration Systems (MERS) of it being transferred all over the place.

I live in a non-judicial state Georgia which has the highest rate of foreclosure in the country. My question is who has my note and deed? And must a company prove they have it before I pay?

It appears my mortgage has just been copied and sent around to various servicers? Now Green Planet is still the servicer and say's that BB&T has bought my mortgage??? I hope you can help me out here.

Thanks, Kurt

Ask Kate at Get-Your-Best-Mortgage-Rate.com
Ask Kate answers: MERS Mortgage Transfers - Where's My Mortgage

Hi Kurt,

You just described the hideous breakdown of the lending infrastructure since MERS was introduced.

One day many years ago sitting at my desk, I shook my head at the direction of the mortgage lending industry.

MERS was supposed to eliminate paper and simplify record keeping. Supposedly. Instead it introduced inaccuracy, unreliability, and fraud.

In fact, MERS' rapid transferring of mortgages without paperwork created fertile ground for robo-signing and fraudulent foreclosure.

But, unfortunately, what you are asking can't be answered by me. I wish I could but these are matters of legality. I urge you to get an attorney with experience in dealing with MERS reform.

More on the consequences of robo-signing at 2013 National Mortgage Settlement Update

Best wishes for uncovering the truth,

Ask Kate


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