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GMAC says Govt Refi 4.875% with 5 points?! How is that legal? Taking advantage!

Profile picture for hulababe
We just bought a house last year at 6.5% interest rate.  Since rates are low and our value is down, we need to go the govt refi.  GMAC (our current mortgage company) is telling us we can only do it at 4.875% with 5 points (23,000 in costs!).  How is this possible?  I thought the govt refi was easy????
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April 23 - Sacramento
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Profile picture for lifebeyondEarth
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I wouldn't take this offer - costly and in this economy you don't know when you have to move.

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18 hours ago
Profile picture for misssac
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GMAC says to us Relief Refi 4.75% with 2.25 points last week. Our credit score is almost 800, no car/ credit card debt, never late on the mortgage, but can't find a new lender for refi.  We have 40K on 2nd. The house value is 420K, our 1st is 412K. What's the deal with Obama's plan????
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1 day ago

I would run to another lender if I were you.  The points and costs are crazy.  Although FHA insures the loan, they do not set the interest rate or points. 

Doing a FHA refinance should be easy, of course there will be costs and in some areas it is customary to charge 1 point but 5 is robbery.

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April 24
Profile picture for WellsFargo626
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Although loan are offered through Government Agency,  but many banks take advantages of the situation and want to make money for themselves. Charging a 5 pts??? I think that's illegal. It 's predatorary lending. I would suggest you to shop elsewhere for better deal.
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April 24
Profile picture for loanm 8kr
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Suggestion  - post a loan request here on zillow and fill out the information as accurately as possible so you can receive quotes from lenders knowing the rest of your scenario..  Five points? wow.....
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April 24
Profile picture for sdov
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Hulababe,

That is insane. You need to find another lender and go with the DU Refi Plus program. As long as your LTV is not above 105%, and everything is fine such as documentation, income, assets, you should qualify. Enter your information into Zillow to get a qoute. If you qualify for this program, I know both myself and other loan officers on Zillow can do much better than that.
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April 24
Profile picture for g8julieh

My current lender is also GMAC, and my closing cost is also near 20000 for 340K loan (credit>800)
the loan officer told me that they can not do anything about this, it is done by Capital markets? anyway, I decided to shop around and get out of GMAC ASAP.

Good Luck!

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April 23
Profile picture for TarheelChip
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How respectable of GMAC to take bailout after bailout from tax payers to only treat the people that just helped them like this? Mail your quote to Barney Frank&thank him for your personal bail out.
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April 23
Profile picture for fmlflorida
homer j,  can I ask what was the LTV that they based your points upon and is your score 720 or better?  I'm trying to see how the points Chase gave you compare to what they're offering me.  Thanks! 
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April 23
Profile picture for homer j
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hula, we are refinancing with our original servicer, Chase.  Just in case I didn't clarify before, it is the government program (HASP/HARP/whatever you want to call it), same thing you're looking to do.

BTW, Chase told me I could only use another servicer for the HASP refinance after May 2nd, when the next DU Refi Plus version rolls out.  Not sure if that is true, but if so, you might have to wait a couple weeks since GMAC isn't being helpful to you.
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April 23
Profile picture for Ashley Blanton
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Hulababe,

Why don't you hop on the bandwagon with the DU Refi Plus. Its the program that was rolled out about a week ago and gets you into better interest rates without having to tack on MI if you weren't paying it already.
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April 23
Profile picture for hulababe
Mine is in the high 700's, but my fiance's lowest score is 716.  Who did u use to refi?  Our value has dropped so much, we can't get a conventional loan, so we are seking the best Fannie Mae lender out there to get a govt refi.
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April 23
Profile picture for homer j
Contributions: 29
Can you post your credit score?

We bought last year at 6.625% and are refinancing now at 4.875% at 1.875 points.  Our credit score is in the low 700s.

I would think you'd only be offered 4.875% with 5 points if your credit score is off the charts low (but if that were the case, you wouldn't have been able to get a rate as good as 6.5% last year, so something isn't adding up).

EDIT - I see your credit score is 716, almost exactly the same as mine/ours.  So, it seems the rate I have been offered is a reasonable baseline.  Not to say I got the best rate (because I'm no genius when it comes to this stuff), but you probably shouldn't be paying more in points than I am.
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April 23
Profile picture for Justin Kennedy
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Hulababe, you need to send that gfe to the congressmen that are limiting mortgage brokers. govey refinance ( streamline?) 4.875% should be par. broker fee will vary. if streamline ask about flat fee. FHA streamlines are very simple and seamless loans.
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April 23
That is the maximum allowable points under Fannie Mae's guidelines.  You need to make sure your not looking at the prepays as part of the points.  Prepays are one month of interest, that you would pay anyway and if your taxes and insurance are escrowed they are part of the prepays and are not considered points.  Add up all the fees that are charged in section 800 of your hud-1 or good faith.  They other stuff you really don't have any control over.

If you have removed those items and are still paying 5% your going to make one loan officer a very happy person.
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April 23
Profile picture for hulababe

I have no idea what our counties loan limits are.  We are in Orange County, CA.

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April 23
Profile picture for Mark Wilkins
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Do you know what your counties loan limits are?  It could be becuase it is considered High balance. 

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April 23
Profile picture for Jeff405
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This is almost comical.

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April 23
Profile picture for fmlflorida
Points are going to be based, in part, on your credit scores and LTV, though 5 points sounds a bit much.  If your loan is backed by Fannie Mae, shop around.
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April 23
Profile picture for hulababe
GMAC just told us they can do a govt refi at 4.875% with 5 points!  5 freakin points?!!!??  Isn't this govt money, not get your pockets fatter??
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April 23
Profile picture for hulababe
My credit score is higher, but my fiance's credit score is 716.  We bought our property last summer at 530k (which was 50k less than the comps, thank you foreclosures!!!).  We financed 417k at 6.5%.  Since then, the comps (only bank owned) are around 510k.  We aren't sure what our property value is at this moment in time.  Back in August, it appraised for 550k.
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April 23
Profile picture for yaegermike
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What is the rate they are offering?
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April 23
Profile picture for hulababe
Ok, I thought this was supposed to be more cost effective.  Yes it saves me $300 a month, but adds $23k to my principle putting me at 440k loan.  Is there any way to do a govt refi without getting taken advantage of?  1 or 2 points, fine.  5, come on dude!
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April 23
Profile picture for Rob Cochems
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hulababe,

You have any idea what your credit score is?  What is your loan amount and property value also?
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April 23
Profile picture for yaegermike
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Easy and cost have nothing to do with each other.
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April 23
Profile picture for Mark Wilkins
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Shop around.   They dont have to do it with that many points. 
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April 23
 

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