PSA for those with underwater mortgages

[Mxylplyx]

I just successfully completed a refinance on my house that has dropped 80K in value over the past 3 years. My house appraised at 199K, and I just refinanced with a 237K loan, which ends up being about 120% LTV. My interest rate dropped from 5.625 to 3.875, and I'm saving over $300/mo. You can even roll your closing costs into your underwater mortgage if you wish. Dont miss this opportunity if you are eligible.

If your loan was acquired by fannie mae or freddie mac on or before 3/31/09, you are likely eligible. Go to the following link to see if they own your mortgage

http://www.makinghomeaffordable.gov/tools/does-fannie-or-freddie-own-your-loan/Pages/default.aspx.

If they do, find a harp participating lender, or refinance with your current lender. I used aimloan which went pretty smoothly.

 

[sactoking]

I've been trying to do an FHA streamline refi for months now but due to my wife's work situation the lenders keep telling us that reducing our payment $200-300 per month is more risky.

 

[JimKiler]

I've been trying to do an FHA streamline refi for months now but due to my wife's work situation the lenders keep telling us that reducing our payment $200-300 per month is more risky.

a lot of logic in that statement the bank tells you.

 

[OutHouse]

thanks for the info.

get ready to get flamed by asshats who will call you a deadbeat for not paying your bills and for buying more than you can afford.


looks like your loan needs to owned by fannie to qualify for this.

 

[Bateluer]

I've been trying to do an FHA streamline refi for months now but due to my wife's work situation the lenders keep telling us that reducing our payment $200-300 per month is more risky.

Not really following their logic there . . . because it'll extend your mortgage a while longer?

 

[sactoking]

No, my wife's old job was commission-based and now she's self-employed. Even though we can document all of her commission income and she's doing quite well on her own the lenders refuse to consider the commission income and her self-employed history is too short so we are forced to qualify only on my income but they use our joint debts so debt:income is too high thus we're "too risky" at $1200/month even though we're ahead in our payments now at $1450/month.

 

[NutBucket]

So in other words the bank wants to continue taking more of your money and will continue to do so until you actually miss payments. Fucked up isn't it?

 

[sactoking]

So in other words the bank wants to continue taking more of your money and will continue to do so until you actually miss payments. Fucked up isn't it?

Except I haven't even tried to refi through my existing lender, these are new lenders who think this way. Since my loan got sold to Countrywide and then to BofA I never tried doing the refi through them since I knew they'd try to bone me.

 

[SlitheryDee]

get ready to get flamed by asshats who will call you a deadbeat for not paying your bills and for buying more than you can afford.

I'm one of the guys who was ready to say something like that, but this doesn't seem to warrant it. I don't have a problem with people refinancing to get a lower interest rate and make the notes manageable. What I have a problem with is people thinking that the are owed something just because this thing they bought changed value in a way that negatively affects them. Like, the bank should just forgive the amount of the original loan that is greater than what the current value of the house is or something like that. What the op is doing is more akin to taking action that makes it possible to not be a deadbeat.

 

[JeffreyLebowski]

So in other words the bank wants to continue taking more of your money and will continue to do so until you actually miss payments. Fucked up isn't it?

Pretty much defines why our economy is failing. The insolvent and those that couldn't afford what they bought are rewarded. Those of us that pay)paid) our bills, and did everything right, are treated like crap and forced to keep paying more ( Someone responible has to pay those dead beats loans).

 

[Insomniator]

I thought Obama was bailing you guys out?

 

[BoberFett]

I've been trying to do an FHA streamline refi for months now but due to my wife's work situation the lenders keep telling us that reducing our payment $200-300 per month is more risky.

Yeah, it's pretty hilarious that you basically have to requalify to refinance.

Wait a second. You already have a mortgage. How is there any more risk in refinancing than is already present?

Banking and the laws around it make zero sense.

 

[mrCide]

strategic default..

 

[sourceninja]

We talked about doing a refi, but after 7 years I'm not sure its' worth it.

 

[hanoverphist]

Except I haven't even tried to refi through my existing lender, these are new lenders who think this way. Since my loan got sold to Countrywide and then to BofA I never tried doing the refi through them since I knew they'd try to bone me.

im in the same situation. but i remember getting a lawyers letter back when they did the buy out, that said they were bound by some class action case to offer better-than-average refi deals to the people that got pushed onto BofA. i had called them at one point for a refi offer, but turned them down. i need to refi to get my ex wifes name off at some point, the quick deed just takes her off the ownership. either way, im a bit upside down, but its a really cheap house that i can afford regardless of redoing the financing.

 

[Mxylplyx]

Pretty much defines why our economy is failing. The insolvent and those that couldn't afford what they bought are rewarded. Those of us that pay)paid) our bills, and did everything right, are treated like crap and forced to keep paying more ( Someone responible has to pay those dead beats loans).

The HARP program is not for deadbeats. You have to be current on your mortgage with no missed payments to qualify. This isn't a loan modification, it is a regular refinance with loosened LTV requirements aided by the government via Fannie Mae and Freddie Mac. The reckless lending practices of banks while the government looked the other way was the main driver of this housing bubble, so I have no problem with them doing something to help out people with underwater mortgages.

 

[Mxylplyx]

We talked about doing a refi, but after 7 years I'm not sure its' worth it.

If you have a rate from 7 years ago, it is absolutely worth it if you plan on staying in your house. You could continue making the same payments you are now, and pay off your mortgage much sooner.

 

[Mxylplyx]

Yeah, it's pretty hilarious that you basically have to requalify to refinance.

Wait a second. You already have a mortgage. How is there any more risk in refinancing than is already present?

Banking and the laws around it make zero sense.

Because a refinance is creating a new mortgage security that may be backed by an entirely different lender. The same lender has no incentive to help you refinance since they are making more money off you at a higher rate, especially if they know you are stuck with them. That is why oftentimes the first step to any kind of loan modification is to miss payments so your bank fears a default.

 

[lokiju]

Were they the company you had before the refi?

How long did it all take?

Was there a lot of phone calls involved or are they pretty good about email and electronic forms of communications?

Did you have to pay ANYTHING out of pocket or was it 100% rolled up into the refi?

My wife and I have been looking and trying for awhile now to get this done but everyone keeps saying to wait until the underwriting computer systems everyone uses get updated with the new HARP 2.0 guidelines, which last I heard should be complete by March 15th.

 

[OutHouse]

Yeah, it's pretty hilarious that you basically have to requalify to refinance.

Wait a second. You already have a mortgage. How is there any more risk in refinancing than is already present?

Banking and the laws around it make zero sense.

yea, i would love to refinance what i owe on my house for a lower interst rate but im underwater and banks dont like that. even though i have not missed a payment ever. looks like they would love to get my business.

 

[Texashiker]

get ready to get flamed by asshats who will call you a deadbeat for not paying your bills and for buying more than you can afford.

You forgot about being dumb enough to buy in a bloated market.

 

[Capt Caveman]

The HARP program is not for deadbeats. You have to be current on your mortgage with no missed payments to qualify. This isn't a loan modification, it is a regular refinance with loosened LTV requirements aided by the government via Fannie Mae and Freddie Mac. The reckless lending practices of banks while the government looked the other way was the main driver of this housing bubble, so I have no problem with them doing something to help out people with underwater mortgages.

Correct. I recently finance under HARP. I'm employed and my mortgage is not underwater but I was still able to qualify under HARP which allowed me to refinance with no income/asset verification and minimal application/paper work.

 

[bearxor]

So in other words the bank wants to continue taking more of your money and will continue to do so until you actually miss payments. Fucked up isn't it?

Yep. If you really want it, start missing payments. Banks are very reluctant to do anything unless they HAVE to.

 

[sactoking]

Because a refinance is creating a new mortgage security that may be backed by an entirely different lender. The same lender has no incentive to help you refinance since they are making more money off you at a higher rate, especially if they know you are stuck with them. That is why oftentimes the first step to any kind of loan modification is to miss payments so your bank fears a default.

Not an FHA streamline; in that case the lender is really only the servicer as the loan is fully backed by the .gov.

 

[Golgatha]

Because a refinance is creating a new mortgage security that may be backed by an entirely different lender. The same lender has no incentive to help you refinance since they are making more money off you at a higher rate, especially if they know you are stuck with them. That is why oftentimes the first step to any kind of loan modification is to miss payments so your bank fears a default.

Banks are there to maximize profits. The only language they understand is doing x will result in more profit than doing y. This is why missing a couple of payments is a good way to gain negotiation leverage, provided you don't mind the black mark on your credit rating.