Toledo Talk

HARP refinancing?

Has anyone here researched HARP? Specifically, anyone in west Toledo who is facing declining property values combined with a neighborhood that seem to be going downhill? If I can get my monthly payments lowered, plus a lower interest rate, it seems like it would be making the best out of a bad situation, allowing me to pay down my loan more quickly--and subsequently getting out. But Iím concerned that Iím missing a drawback that will bite me in the ass down the line. Any thoughts?

created by valbee on May 19, 2014 at 03:58:56 pm     Other     Comments: 15

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Have done this.

Don't go through Bank of America or any other "major" lender. They will f@#k you silly and sideways and you will regret it.

Look for the smaller lender that offers the lowest interest rate you can get and is familiar with HARP refinancing. Although you can't control sometimes who your mortgage gets sold to, our bank had a pretty good track record of keeping mortgages in house.

Our mortgage is through a smaller lender with 2 physical locations and people with brains in the branches. Therefore, if we have a question on our mortgage, we aren't calling Darwahalal in Bangledesh to ask if we can have our tax forms re-sent.

Did I tell you I hate Bank of America? I didn't necessarily need the HARP (we were fine and never missed a payment). But (a) to refinance a 6.5% interest rate (hey that was pretty good in 2003), they only lowered by 1.25% (when rates were SUB-4% for chrissakes) and (b) they made the process of untangling from their slimy tentacles so contentious that I swore I would never do anything with them again. Lying prick bastards, from the ordinary tellers to the head cheeses at the local branches, to the pricks that run the entire operation and foreclose on people's homes with an automatic signing machine. A refinance that normally would have taken like 3 months with humans doing the paperwork took 7 because of BOA's paperwork demands and sub-human horseshit. Thank God my wife is an attorney and can handle bureaucracy without blowing a vena cava.

We did the HARP only because it was the product with the lowest interest rate we could find--that was 2 years ago and nothing has happened since. There is no balloon or other surprises at the end....it's just supposed to reset your payments to an interest rate that's more in line with what is being offered currently. Our payment is the same on the amortization schedule from today until 2020-something when it's scheduled to end (if we pay only the minimum due).

Don't let my bitterness get in the way...but seriously, don't do this with a major lender, IMO. Your rate will not be as good, you won't get customer service you like, and you'll never escape their clutches.

Screw BOA forever. And screw the credit union that sold my original mortgage out from under me to BOA because they could get instant cash infusion. Dumped their asses too...

Not that I'm bitter...

posted by oldhometown on May 19, 2014 at 04:14:47 pm     #   1 person liked this

I applied to HARP and they got my present mortgage holder to drop $30,000 from the principle, drop my interest from 6.43% to 2.14% and now I'm underwater barely.

I also find that remaining in c-o-n-s-t-a-n-t contact throughout the application process with immediate follow-up with forms and such faxed from the local branches and not scanned and sent email made my process quick and painless.

You may also look into readjusting your homeowner's insurance after this is all said and done.

And damn OHT, so glad I got the stagecoach as my mortgage holder. I'll never ever bank with BOA after what they TRIED to do to me back in '04.

bastards.

posted by BrianInFlorida on May 19, 2014 at 05:39:59 pm     #  

I refinanced my mortgage 2 years ago with Quicken under the HAMP or HARP program, I forget which. We pretty much had no choice on which bank we used because the bank that owns your note has more leeway on the loan-to-value ratio than other banks. Anyway, we ended up getting down to 4.625% from 6.875%. Not huge, but we also managed to get out of a 30 year fixed that we were 6 years into and moved to a 20 year fixed. It took about 18 months to recoup the closing costs, but we are making a much bigger dent in our principal than we were before.

I also have nothing but good things to say about Quicken, at least during the refi process. They were really attentive and organized.

posted by Ace_Face on May 19, 2014 at 05:46:17 pm     #  

Oh, and Valbee, you also have to stay in the home for at least 5 years after acceptance, after which time the interest rate will climb barely, as mine will from 2.14% after 5 years goes to 2.84% for two, then it slightly increases every couple of years until the mortgage is paid off.

And your results may differ slightly. I was one of the lucky ones that had zero drama.

posted by BrianInFlorida on May 19, 2014 at 05:47:42 pm     #  

I was told by Quicken that I was not eligible because my loan is a VA loan. Anybody with a VA loan had any luck in getting a better interest rate on an under water mortgage?

posted by Erin on May 19, 2014 at 09:08:03 pm     #  

I have no experience with harp but will second the warning to stay away from BOA. I used them years ago. The refinancing took 7 months. Paperwork would take so long that they has to start the process over 2 or 3 times. The highlight was our contact running a credit check, then calling me 3 days later to inquire as to a recent credit check on my account. Complete incompetence.

posted by nick44 on May 20, 2014 at 06:29:24 am     #  

I appreciate the feedback, everyone! I'll make sure to stay away from BOA. My current mortgage is (and has been) with Charter One/CCO. I have a 5% rate and since I'm on the automatic deduction plan, I've made a bit of a dent on the principle in the past 11 years. I could stay here for five more years. I don't want to stay here for much longer than that, though.

Did you all have to go through an appraisal and if so, what was involved? I've read that it's not necessarily the same as a typical refinance.

posted by valbee on May 20, 2014 at 07:26:13 am     #  

Did you all have to go through an appraisal and if so, what was involved? I've read that it's not necessarily the same as a typical refinance.

We did not have to go through an appraisal. I think the bank probably did some due diligence on the property (i.e. made sure that a toxic waste dump was not being developed next door or something), but we didn't have to get an appraisal. After all, the purpose of HARP is for homeowners whose value has declined to the point they can't do a traditional refinance.

http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx

posted by oldhometown on May 20, 2014 at 02:32:35 pm     #  

Did not go the HARP route, but in a recent refinancing we were very impressed with Quicken Loan. Competitive rates, no games, efficient service, and they have this down to a science. Oh, and they come to your house to sign the documents, which is a plus for busy people.

posted by historymike on May 20, 2014 at 02:45:25 pm     #  

I too had noone come and assess or appraise the property.

Just spent a lot of time downloading files, filing them out and driving to the local branch to fax 'em back.

posted by BrianInFlorida on May 20, 2014 at 05:15:19 pm     #  

I am a local mortgage originator. For the standard HARP loans there are no surprises that will bite you down the road. Fixed rates, no prepayment penalties, and no requirements to remain in your home. There are closing costs which can be financed into your loan in most cases and generally no appraisal required and no up front fees. Last one I did fees came out to about $2400 for a $126,000 loan. It comes down to asking if you will save enough to justify the closing costs in a reasonable period of time.

posted by bobthedad on May 21, 2014 at 10:15:43 pm     #   1 person liked this

If there is no appraisal required, how can you be sure the property is worth the amount of the mortgage?

posted by JeepMaker on May 23, 2014 at 08:42:26 am     #  

JeepMaker posted at 08:42:26 AM on May 23, 2014:

If there is no appraisal required, how can you be sure the property is worth the amount of the mortgage?

Shhh, please ignore the fact that the mortgage industry has gone right back to the practices that caused the melt-down in 2008 and let people borrow, borrow, borrow if that is what they want to do. After all it only hurts them.

Seriously, HARP is about getting mortgage payments affordable for the homeowner; if they are already under water, its better to keep them in the under-water house and paying with a refinanced HARP loan than to kick them out, leaving them to rent (because their credit is bad or they don't have enough income to get a new mortgage) and a vacant house owned by the bank. An appraisal is just wasted money at that point.

posted by MrsArcher on May 23, 2014 at 09:15:18 am     #  

The whole purpose of the HARP loan program was to allow responsible borrowers who pay their bills on time to take advantage of lower current interest rates. You don't get a HARP loan unless you have made your payments on time. Many use the program to take a shorter term to allow them to get out of the underwater position sooner. They are refinancing balances and reasonable closing costs only and they do not allow you to get cash out or pay off a second mortgage. If FNMA or FHLMC is already on the hook for a loan that is likely to remain underwater for the foreseeable future, what do they have to lose by allowing them to get a better rate and a better chance at turning things around?
The rates can vary slightly based on how underwater you are, but the appraised value is determined by an automated valuation model from the database of home loans already on the books.
FHA has had a streamline refinancing program for decades that also requires no appraisal.

posted by bobthedad on May 23, 2014 at 09:57:17 am     #  

Pretty much everything you said, bobthedad, is what I was told when I contacted my mortgage company. I've actually opted not to do HARP right now, because the rate they quoted me is only a half percent lower than what I have now, my payment would be less than $75 lower and even with a 15 year mortgage, it would set me back several months toward payoff. Ultimately, it's not worth it to me.

I very much appreciate all the advice listed here, however. If nothing else, this was a great exercise in determining exactly where I stand--and surprisingly, it's not as bad as I feared. There's hope yet! :)

posted by valbee on May 23, 2014 at 10:38:08 am     #   2 people liked this