Category

condo

Why Fannie Mae Would Rather Foreclose On My Condo Than Let Me Refinance

By bills, condo, drama, financial wisdom, hazards to my well-being, mortgage, not ruling at life, top notch communication blunders, you might learn something 2 Comments

Okay. I’m seriously over this crap with the mortgage. If you don’t know the story by now — let me get you caught up: Bought the place in 2006 with a friend. She moved out and got married. We’ve been renting out her room. Interest rate is ridiculous because we financed 100 percent. I’m trying to refinance the condo into my name only because she wants out. We’re underwater, and we have private mortgage insurance (PMI) on our current loan. Mortgage company encouraged me to apply for a short refinance. Did everything they said (even though more than half of what they said was completely screwy). Argued with them for five months before they gave me a final response. This is what happens next.

They said no. Want to hear why? Because we’re current on the loan. No late payments. But here’s the best part. LBPS wants to file a claim with the mortgage insurance company, and they won’t submit my short refinance request to Fannie Mae for review until the PMI company agrees to pay the claim. And the mortgage insurance company has a strict policy that they don’t pay claims on any accounts that are less than 60 days past due. And LBPS has been aware of that policy since January 2010, but they still encouraged me to pursue this option.

Guess what else. If we fall 60 days past due on our account, I’m pretty sure I’m not going to be securing any decent financing on this condo. Basically, I’d be better off whacking myself in the face over and over with a frying pan than even bothering with these idiots anymore.

I decided enough was enough. I went over LBPS’ head and spoke with Fannie Mae directly. Want to know what they said? Want to know what Fannie Mae (who received $200 billion in bailout money) said to me? Wait. Let me tell you what I said to them first.

I said, “Here’s the deal. I want to give you all your money. I want to pay you. I understand that my condo was a bad investment, and I’m willing to cough up the cash. But I need to refinance. My co-borrower is going to end up filing for bankruptcy if I don’t. I’ve secured financing for 97.5 percent of the current value of my condo at a super-low interest rate, and I’m willing to sign a promissory note to pay the rest of it back to you over the next few years. But LBPS won’t send my documents to Fannie Mae for review because the PMI company won’t pay on the claim. Isn’t there anyone I can negotiate this with? I’m willing to pay you, so you won’t have to put in a claim!”

They said, “No ma’am. You cannot negotiate with us. You must go through your servicer, LBPS. We are not participating in the short refinance program. We do not forgive principal on loans with PMI because if we let the home go into foreclosure, we would collect on the insurance claim.”

Fannie Mae pretty much just told me that they’d rather let my condo go into foreclosure than work out a deal to let me repay them their freaking money. This is a joke, right?

I’m also pretty sure the exact words,”Then I guess you have no more options, ma’am,” came out of this woman’s mouth after I explained to her all the different ways I’ve attempted to rectify this situation since December 2008.

Keep trying to back me into a corner, Fannie. No wonder people walk away from their homes. The average American doesn’t possess the patience and/or mental capacity to navigate their way through this bullshit, but I’m dead set on refinancing this piece of property without screwing up my perfect credit score. It would be nice if you would help me out, but I’ll keep fighting you on it if you won’t. Got it?

This crazy trip has got me feelin’: irate
And I’m singin’ along to: F*ck You – Cee Lo Green

Short Refi: A Status Report

By condo, financial wisdom, hazards to my well-being, home improvement, mortgage, not ruling at life, skills, top notch communication blunders, you might learn something 2 Comments

I’ve gotten so much feedback from my mortgage-related posts that I figured I’d post a little status update. I actually feel like my experience may be helping some of you or at least pointing you in the right direction, which is pretty cool because it makes me feel a little less like I’m wasting my time with this whole issue.

So the status is this: back on track for the short refinance. Quicken Loans ended up being much more intelligent than I initially thought. After about six phone calls, I managed to reach some super-efficient department in their company who processed all of my paperwork and had a conditional loan approval and a preliminary HUD-1 in my hands within three days. Sweet!

I thought the loan approval would be the downfall of this entire plan. It’s the paperwork that Wells Fargo was previously unable to provide. It turned out that Wells Fargo (and several other lenders that I contacted) were doing short refinances inside their own bank, but not outside the bank. Bummer for me, since my loan is serviced by a company that doesn’t write new loans.

Turns out, the trick to getting a conditional loan approval is this: they approve it conditionally for the new loan amount (the short payoff). What Wells was doing was trying to conditionally approve it for the current payoff amount, which left a huge chunk of money unaccounted for. Therefore, the underwriters couldn’t really approve it. Does that make sense?

What Quicken provided me with is a conditional loan approval with for a decreased amount of money (with a super low new interest rate), which I then forwarded on to LBPS in order to be reviewed for a short payoff. Unfortunately, LBPS can’t get their shit together, so they keep accidentally reassigning my account back and forth between Group 7 (their liquidations department) and Group 8 (their loss mitigation department). Group 7 handles short sales, short refinances and forclosures. Group 8 handles modifications (I believe HAMP, HARP, internal modifications and initial HAFA reviews).

So, as I write this, I’m back on hold with LBPS trying to get my account transferred back to the loan officer I was working with back in August. My biggest issue right now is that it’s pretty much impossible to get any representatives on the phone who understand what a short refinance is and how it works. I’ve been getting the run-around from these people for months, and they keep saying it’s because I’m current on my payments (which, coincidentally is a requirement to be approved for an FHA Short Payoff Refinance loan). Idiots.

If you’re trying to do anything like what I am, here’s my advice so far:

1. Be persistent. I’ve been trying to refinance my condo since late 2008. I didn’t discover the short refi option until August 2010, and I’ve been at it ever since.

2. Take good notes. Make a note of every single person you spoke with, their department, what they told you, and the date. If someone else tells you anything contrary to what that person said, refer them back to the notes on your account from the date and person you spoke with. I use Evernote to keep track of all my notes and documents related to this catasrophe.

3. Do your research. I spend about 20 minutes a day reading about mortgages, Fannie Mae and the options that are out there. I also read legal information about my rights as a borrower. I’ve spoken to several lawyers (free of charge), and I’ve also picked the brains of appraisers, brokers and real estate agents. The rules surrounding the federal programs change often, so I’m always looking for new information and new ammunition to light a fire under my mortgage company’s butt. I even had a 15-minute conversation with a guy who works for a company who changes locks when banks forclose on properties. That was interesting. Oh, and tonight I had to explain to a short sale officer how to read a HUD-1. So that was awesome, too.

4. Be assertive. Do not let a whole week go by without checking the status of your requests. Mortgage companies will tell you to fax things and check up seven to 10 days later. This is BS. Call three hours later to make sure they got it. And then call every day after that to see what they’re doing with it. Also, if there’s something specific you want noted on your account, ask the representative to type it in there verbatim and then read it back to you.

5. Get someone intelligent on the phone. Don’t waste your time talking to morons. When I call, I say, “Please review the notes on my account dated August 17, August 29, September 9, November 6, and December 17.” After they’ve read them, I say, “Can you briefly summarize what I’m trying to accomplish?” If they can’t, I thank them, hang up, and call back. I do this until I get someone who at least understand what’s going on, you know?

Anyway, I’ve had about enough for tonight. For some reason, my account is assigned to a woman in the wrong department who is in training all week and won’t be able to assign it back to Group 7 until next Monday. This is completely unacceptable, but I will deal with it tomorrow. I now have a fax number for LBPS that is completely dedicated to written correspondence. They’re required to answer any written request they receive in writing. That number is 877-371-7799, and I’m pretty much going to fax every single piece of documentation I’ve ever sent them to that number tomorrow.

Want to see the other contact info I have for them?

Main number: 866-570-5277
Fax imaging number (creates documents that are uploaded to your account in their system): 877-649-0723
Direct number for Group 7 (Loss Mitigation): 888-917-6004
Written request fax number: 877-371-7799
Rush fax number (not verified by me): 503-616-3604

That’s about it for now. Wish me luck.

This crazy trip has got me feelin’: over it
And I’m singin’ along to: Don’t Stop Believin’ – Journey

LBPS Strikes a New Low

By condo, conversations, drama, financial wisdom, hazards to my well-being, mortgage, not ruling at life, top notch communication blunders, you might learn something 8 Comments

Today, my mortgage company (IBM LBPS) really blew themselves out of the water. As you may know, a few months ago, I was working with them to try and negotiate a short refinance. To make a long story short, that was an epic failure. After four months of LBPS giving me the run-around and other lenders telling me they could approve me but not give me the proper documentation to show it, I’ve pretty much given up hope on the short refinance. I think what sealed the deal was this chat conversation that I had with Quicken Loans (LBPS’ recommended refinance experts!) last week:

Thank you for inquiring with Quicken Loans, we’re America’s #1 online lender and do business in all 50 states! Please hold while we connect you with the best suited Mortgage Expert.
You have been connected to James Springer.
James S.: Hello Lisa. How can I help you today?
Lisa: Hi, James. I have a current mortgage with IBM LBPS, and they recommended me to Quicken Loans. I am trying to work out a refinance with an FHA Short Refinance loan — do you have any loan officers that specialize in these short refis?
James S.: What do you mean by ‘short’ refinance?
Lisa: Have you ever heard of this program? https://www.quickenloans.com/mortgage-news/mortgage-program-underwater-fha-short-refinance
James S.: Ok. I need your full name, address, date of birth and social security number.
Lisa: I’m not giving you my social security number through a chat window.

Really? Really.

So, on to my next few options. I did some research on more of Fannie Mae’s options for upside-down borrowers, and I actually found a pretty attraction program called Home Affordable Foreclosure Alternatives (HAFA). HAFA is an extension of the Making Home Affordable options (HAMP and HARP), neither of which will work for my co-borrower and I. HAMP is the Home Affordable Modification Program, which modifies eligible borrowers’ loans to make monthly payments more affordable. HARP is the Home Affordable Refinance Program, which enables eligible borrowers to refinance up to 125 percent of their property’s current value at a lower interest rate. Unfortunately, borrowers with private mortgage insurance (PMI) on their loans only qualify to refinance 95 percent of their home’s value under HARP.

HAFA offers three additional options – a short sale, a deed-in-lieu or a deed-for-lease. All three of these options are potential contenders because all three will get the loan out of my co-borrower’s name. Although, they’ll all get the loan out of my name, too, so it looks like I may be moving soon. (Closer to the beach, of course.)

From what I can tell, the HAFA options are a little more borrower-friendly than their traditional counterparts. Normally, short sales can be tricky and involve lots of delays and last-minute negotiating once an offer is made on the property. For instance, a lender won’t even really review/approve a traditional short sale until the property is listed and the seller receives an offer. In the meantime, the lender can begin foreclosure proceedings if the homeowner isn’t staying current with their payments. Plus, in states like Virginia, the lender may pursue a deficiency judgment for the difference between what is owed on the home and what the home sells for. Same thing with a foreclosure or a deed-in-lieu. That makes these options much less attractive in my state than they may be in other states.

HAFA takes a little more time up front, but the end result seems a little more defined. In order to qualify, the borrower must be reviewed and either approved or denied for HAMP. That can take 30 to 45 days, but once approval or denial is granted, the borrower can request to go the HAFA route for a short sale, deed-in-lieu or deed-for lease. It sounds like lenders will have a borrower at least list the home and try to sell it before allowing a deed-in-lieu, but if the homeowner wants to stay in the home, they’ll offer a deed-for lease. A deed-for-lease means that the borrower signs over the deed to the lender and then rents the property for the going market rate from the lender for a set amount of time. That sounds kind of interesting, huh?

The biggest difference I can see (and keep in mind, I’m not an expert on these things — this is just my full-time hobby) between traditional short sale/deed-in-lieu transactions and HAFA options is that a lot of the terms seem to be negotiated up front for HAFA. Like there’s no deficiency judgments — the lender can’t pursue any money or promissory notes after the closing. Also, the probability of the sale actually closing is much higher, and the seller even leaves the transaction with up to $3,000 in relocation assistance at the end of the deal. This Bank of America PDF about the program actually has a really comprehensive comparison chart on page 9 if you want to check out the differences side by side.

So, you can imagine my astonishment when I called LBPS over the weekend and inquired (of one of their short sale specialists) what the difference was between HAFA and a traditional short sale, and she had the audacity to tell me, “Nothing, really.” Oh, really? Okay.

You can also imagine how appalled I was when I called LBPS twice today and was told, “We don’t do HAFA short sales here.”

“You don’t?”

“No, ma’am. I just asked my supervisor. We don’t do those.”

“Well, that’s interesting. Do you have Internet access?”

“Yup.”

“Okay, why don’t you pull up this website: https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2010/svc1007.pdf. Do you know what this is? This is a letter from Fannie Mae to every single one of their servicers. It says you were required to implement this program by August 1, 2010.”

“Oh.”

“I dare you to tell me again that you don’t do these. Now transfer me to someone who knows what the f— is going on in the freaking mortgage industry these days.”

So, yeah. Story of my life.

This crazy trip has got me feelin’: frustrated
And I’m singin’ along to: Be My Escape – Relient K

Not So Much

By condo, conversations, e-mails, hazards to my well-being, mortgage, not ruling at life, press, top notch communication blunders No Comments

So, it turns out that being quoted in the Wall Street Journal isn’t really all it’s cracked up to be. I think I’m a little too confrontational to read the comments on articles like that. And let’s face it — my quote was taken a little out of context and had nothing to do with the story itself. I could really care less whether anyone thinks America is a nation of wusses or whether I’m a wuss or whatever. I just had a fleeting thought that a sarcastic response to Ed Rendell’s comments would make a funny blog post. It’s not exactly a subject I’m passionate about or anything, you know?

Either way, earlier this morning I was enjoying some humorous banter with the overly opinionated readers that comment on those types of articles, but I got kind of tired of being insulted, so I gave up. Someone actually sent me a private message through my account on the WSJ community (which I just set up this morning in order to participate in what I thought would be intelligent conversation in the comments), and told me that he thought I was a spoiled brat, a daddy’s girl, over-indulged, not funny, really dumb, and clearly not successful in life because I didn’t mention having a husband or children. WTF? Where do these people even come from?

I guess if personally attacking me on the WSJ website makes your day that much better, then have at it. I usually prefer to brighten people’s days by writing funny blog posts and making them laugh, but whatever floats your boat.

In the meantime, don’t even get me started on how stupid this is. This is what I deal with on a daily basis, as I’m still trying to refinance my condo. This is a chat conversation with a “mortgage expert” on the Quicken Loans website. (I chose the chat conversation because I was trying to figure out the correct number to call.)

Thank you for inquiring with Quicken Loans, we’re America’s #1 online lender and do business in all 50 states! Please hold while we connect you with the best suited Mortgage Expert.
You have been connected to James Springer.
James Springer: Hello Lisa. How can I help you today?
Lisa: Hi, James. I have a current mortgage with IBM LBPS, and they recommended me to Quicken Loans. I am trying to work out a refinance with an FHA Short Refinance loan — do you have any loan officers that specialize in these short refis?
James Springer: What do you mean by ‘short’ refinance?
Lisa: Have you ever heard of this program? https://www.quickenloans.com/mortgage-news/mortgage-program-underwater-fha-short-refinance
James Springer: Ok. I need your full name, address, date of birth and social security number.
Lisa: I’m not giving you my social security number through a chat window.

This crazy trip has got me feelin’: disappointed
And I’m singin’ along to: Theme from A Summer Place – The Lettermen

My Attempt at a Short Refi

By condo, drama, financial wisdom, hazards to my well-being, home improvement, life-changing purchases, mortgage, really great money-making ideas, roommates 13 Comments

It’s nice to have this blog back up and running, especially on days like today when it’s cold, windy, rainy, and I’m in no state to be taking photos of myself twirling around in a pretty skirt. I like the fashion blogging, but some days I don’t have the motivation to dress up and take photos to post online. I had a free day off from work today (in return for working all those ridiculously long hours that last two weeks), and now that I’ve run all my errands, my main goal is to put the final touches on my short refinance package that I’ll be sending to the mortgage company.

I know I’ve written some ranting posts about the mortgage company recently, so I thought I’d share some interesting things I’ve learned over the past few years that I’ve been arguing with those idiots.

You’re probably already aware of the fact that I purchased my condo in 2006 with my friend/roommate at the time, and she’s since moved out, gotten married and started a family. We financed 100 percent of the value of our condo when we bought it, and since we had hardly any credit established between the two of us, we’re paying a ridiculous interest rate on our loan. (Ridiculous.) We’re obviously updside down in the property — just like everyone else on the planet — and we’ve been trying to figure out a way to get her name off the loan for almost two years now. She’s not interested in owning the condo anymore, but I live there, so I’m not really willing to sell it or give it up any time soon.

Of course, the bank won’t assist us in any way because we’re current on our payments, and unfortunately, since we’re upside down, there’s no refinancing unless we want to sink a bunch of money into the black hole we refer to as “negative equity.” The government loan modification programs won’t help us because modifying a loan doesn’t remove a borrower from the note — it only modifies the terms of the loan, like possibly the interest rate and the monthly payments. (And I’ve heard lots of sketchy stories about those modification programs anyway.)

After all my digging for options, I’ve only come up with four ways to get my co-borrower off of our loan:

1. Refinance, which would cost tons of money (see above).

2. Short sale, which would ding both our credit reports and most likely result in me being unable to buy another home in the next few years.

3. Foreclosure or deed in lieu, which, again, would ding our credit reports and definitely result in me being unable to buy another home for a few years.

4. Short payoff refinance, the best option yet. This process is similar to a short sale, but instead of the property being sold, it is simply refinanced with a new lender. Well, 97.5 percent of the current value of the property is refinanced with a new lender, and the remainder of the principal is forgiven by the previous lender.  In our case, it would be refinanced only into my name, removing her obligation from the old mortgage and leaving me as the sole owner of the condo. Doesn’t that sound perfect?

Before I learned about this program, I had been asking for years whether it was possible for me to short sell my condo to myself, and everyone kept telling me no. Why not? I’d wonder because it always seemed like a great idea to me — kind of like a price adjustment for my house.

A few months ago, a short sale officer with my current lender suggested a short payoff refinance to me. He explained how it works, and sent me on my way to find a new loan. It took a few calls to locate a bank familiar with the FHA Short Refinance Loan. Apparently the program is pretty rare — there aren’t really any incentives to encourage banks to let homeowners do this, and it’s a huge pain in the ass to convince them. Besides, you have to be current on your loan and have decent credit to qualify for the program. I’m sure a lot of people are already in too much trouble by the time they reach out for help to take advantage of something like this.

When I say it’s a pain in the ass, I’m not kidding. The program was first brought to my attention in June, and it took me almost three months to get another person on the phone at LBPS (the servicer of my current mortgage) who would even acknowledge that the program existed. “We don’t do those,” they’d say. “I don’t know what you’re talking about.” “I’ve never heard of that.” Finally, two weeks ago, I demanded that someone list off the names of everyone I had ever spoken to at LBPS and the  dates I spoke with them. I caught a date and a name that sounded familiar and waited on hold to speak with that person for more than two hours. When he finally picked up, he remembered me.

I do remember advising you to try that, Ms. DeNoia,” he said. “We really don’t do those, but you’re right. Your situation is a unique one. If you’ll write a hardship letter and gather the required information, I’ll try to make a case for you.”

Many say the program is doomed, but I’ve got my paperwork done and ready to go. If they’re going to make and exception for someone, why not me? It’s at least worth a shot. There’s a chance this could save me a lot of money in the long run and decrease my mortgage payment by a pretty significant amount. It would be well worth the two years of bullshit I’ve had to deal with with these freaking mortgage companies (companies, plural, because my loan was sold in April).

I’m sending in my package for approval tomorrow, and in the meantime, I’ve been sending my mortgage payments via certified mail to make sure LBPS doesn’t try to screw me out of being eligible for the FHA loan by marking one of my payments late. I’ve got a lawyer, a lender, and a new loan all ready to go, and if LBPS approves it, it’s possible that I could close on the new loan before Christmas. Score!

If it doesn’t work, then maybe I’ll figure something else out. It doesn’t make much financial sense to pay as much as I’m paying to live in my condo right now because I could give it up and rent one for a lot less every month month, you know? I don’t know about you, but I’m not convinced that a squeaky clean credit report is worth thousands of dollars. I’d rather take the hit, move out, and save the money if I have to make that choice because I’m not sure my property would regain it’s value in the time it would take me to recover and purchase something new for less money.

Either way, for now I’m just keeping my fingers crossed because this could turn out to be a pretty sweet deal.

I normally wouldn’t share my financial information on the Internet like this, but I’m sure there are others out there struggling with housing issues. If all the time I spent trying to get this loan under control could assist others in some way, maybe I wouldn’t feel like it was wasted — even if my attempt at a short refi falls through. I’d love to hear your real estate stories if you’ve got any good ones. E-mail me if you’re not comfortable leaving a comment. I’d be happy to give you some advice on how to get your mortgage company to respond — for me that’s been the biggest challenge.

This crazy trip has got me feelin’: persistant
And I’m singin’ along to: Walk Like A Man – Frankie Valli & The Four Seasons