I recently closed on the refinance of my condo. It has been a long time coming, considering the fact that I tried to do a mortgage modification back in September of 2009, and after almost a full year of submitting (and re-submitting every quarter) all the requested paperwork, I was ultimately told that I didn’t prove that I met the hardship requirement.
So, when the Obama Administration announced the HARP 2.0 initiative, I was kind of skeptical yet fairly excited since the “hardship” requirement was gone.
I made a call to Chase, who held the original mortgage to find out the exact details of the program as it pertained to their participation, and waited for the word to come along of when it was to take effect. The problem was, and I should have known, that in most instances nothing is ever as easy or smooth as it is made out to be.
From my very first conversation with the Chase mortgage representative in Arizona (you will see why this little fact is important soon enough), all of my questions were addressed completely and satisfactorily.
Not only that, but the rep sent periodic emails when more information was made available to them so that I, along with anyone else with whom he was working, would be kept in the loop.
Ultimately, it was announced that February 6, 2012 would be the day the program went live.
I’m not one who likes to be late to the party when it comes to the chance to save some significant coin, or very much else for that matter, so I made a point to call my rep the minute I got home from work on that very evening.
It was great, he answered right away, and we got the ball rolling right then and there. He took all of my information to make sure it was as they have it recorded in their files.
I gave him all of the information as it relates to income and housing situation, even offering to provide proof of income and residence (as opposed to this being an investment property which would eliminate me from the program), but he said it wouldn’t be necessary.
He sent me the authorizations to sign for him to run my credit and obtain copies of my tax returns, and within minutes of receiving it, the document was signed and in his inbox.
We got everything squared away and moved onto the numbers.
I told him how I wanted to roll all of the costs back into the loan, and how everything else should stay the same as far as my taxes being escrowed, but the insurance remaining separate from the escrow account, and being solely my responsibility.
The numbers ended up being quite favorable for me. I got to knock off 2.125% from my interest rate for a savings of over $300 per month! We were plowing forward at breakneck speed. I couldn’t believe how smooth and effortless this was compared to my last attempt to obtain some relief from the dumb luck I ran into by buying at the top of the market cycle right before the subsequent crash.
Boy, was I premature in my celebration. Here is a timeline of the chain of events that followed:
February 10–I schedule the appraiser to come out the following morning.
February 11–The appraiser is a no show, and not as much as a phone call.
February 13–I receive an email from the processor in Ohio (told you the reason for giving the location would become apparent) stating that the loan went to underwriting and a determination should be expected in 7-10 business days, with his goal of wrapping up the entire process within 45 days.
February 14–The appraiser, from a different company I presume, comes and inspects the property.
February 17–The refinance is approved, but they ask for a letter of explanation regarding the ownership percentage of my business. That was easy enough to take care of.
February 18-March 14–No communication from the processing representative in Ohio, so I call my Arizona guy to let him know that I haven’t heard a single word.
March 15–I receive an email from the Ohio processor informing me that the new loan is in underwriting for final approval. he states that he hopes to have it completed by the end of the month (March)
March 20–Another email from Ohio telling me that it is still in underwriting.
March 27–I receive an email from Ohio asking me to verify income and liabilities. The numbers he sent for verification are correct on the liability side, but he is only reporting half of my monthly income. That pisses me off. I call my guy in Arizona to tell him what’s going on and he gets pissed since, with this program, none of that stuff even matters.
April 2–I finally get a response from Ohio on the income/liability verification issue, 5 days later, apologizing for the delay and telling me that proof is not needed but verification is. This is totally the opposite of what I was told, and in fact ends up not being necessary in any form. And, he totally ignored my response to the first inquiry correcting his figure! I also ask that he push it along, since we were approaching 2 calendar months with this already, and past his target of the end of March. His response is that he will do that and “it should be clear to close by the end of this week” (week ending April 6).
Of course the end of the week comes and goes with no word on the closing. Big shock there!
April 12–I get an email from Chase saying that my welcome package is available for viewing. This is the same email I received that included all of the papers to start the process. Needless to say I freaked out. I emailed and called the guy in Ohio, but of course got no response. So, I got on the phone to Arizona and my guy out there got everything all cleared. Apparently the Ohio processor filed the papers incorrectly which caused the email to go out.
April 13–Ohio guy emails to say that we are clear to close, and set up a time on April 16 for the notary from the title company to come process everything. Of course, that just happens to mark the 45th business day of the process since his declaration that it would be done in 45 days. He also tells me that I will have the final HUD statement to review before the closing.
April 16–I never receive the final HUD. The title rep shows up, and we start going through the paperwork. Lo and behold, the information is incorrect. They are expecting me to pay $2,500 to close, plus the insurance is included in the escrow. We each get on the phone to clear it up. As it turns out, no one is around to take care of it, so I leave a message for the Arizona rep.
April 17–The guy in Arizona calls me in the morning and he isn’t very happy with the situation either and tells me he will make some calls. A little later I get a message from the Ohio processor apologizing (once again) because he went home ill before lunch and never got to send me the final HUD. Plus he didn’t see the errors I pointed out, if he even looked at it to begin with. The loan had to go back to underwriting for re-approval since I had a payment in transit, and it hit the account before anything got settled. Then they had to rework all of the intermittent figures like taxes and interest.
April 18–Another email from Ohio stating that everything was fixed on the HUD, and asking if closing can be set for the coming Friday (April 20th), to which I say “yes!” He then asks (like he always does at the end of his messages) if there is anything else he can do for me.
April 19–I rant about not understanding why my insurance has to be escrowed since it was never done that way on the previous loan. He goes on about them needing to have a years of insurance paid into the escrow account and blah blah blah (I stopped paying attention because this guy does nothing but piss me off with his delays, mistakes and apologies) until I see him tell me that I have to pay additional points to have the insurance non-escrowed. That put me into a rage. Again, I call out to Arizona and vent to the rep out there, who, once again, calls Ohio and sets this guy straight on what does and doesn’t need to be done with this loan.
April 20–Day of closing (again). I get a final HUD, and it has me paying no money at the closing. However it still shows my insurance as part of escrow. I send it back telling the Ohio processor to fix it and get me a new copy before the end of the day so I don’t waste any more time with another failed closing. I hear nothing until 4:37 PM, 23 minutes before the processing department goes home for the weekend, when the new HUD finally arrives. I’m fuming, because if anything was wrong, there was no way it would be corrected in time to close. I finally closed later that evening.
May 15–I received the refund check for the additional interest charged as a result of the Ohio processor’s screw-ups leading to the additional delay in closing.
I have to say, although it was much easier to to the refinance than it was to try with the modification, there were way too many bumps in the road for my liking. For something so straightforward and simple, there were a ton of mistakes and the guy processing the new loan sure showed a pretty high level of ineptitude.
I had to give a huge amount of thanks to my rep out of the Arizona office. Without him, I would have stopped the process after the first failed closing and gone elsewhere. He did an amazing job of putting out the fires caused by the guy in the Ohio office.
In fact I emailed the whole thing to the Arizona supervisor and talked to him on the phone about it, telling him how lucky he was to have the guy who was working with me in his department.
At the end of the day, I have to say that the HARP 2.0 program did do what it was supposed to do for someone in my position, who ended up getting screwed by others while continuing to hold up his end of the bargain.
Have any of you tried to do a refinance under the HARP2.0 program? Are you considering it? Share your thoughts or experiences in the comments!