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HARP Refinance Nightmares?

3 months ago - credit cleaned up. down payment secured. oops, your townhouse isn't worth what you thought, you should refinance. Okay, great - we would love to have a rental/income property and that would work great for us.
1 month ago - your credit is great, your income is plenty, your debt is small. Your approved for what you want and your refi should only take 3-4 weeks. Your HARP refi is moving along.
3 weeks ago - we can't do both your refi and your home purchase loan. BTW... your HARP loan is now going to take longer because you had PMI on your original loan and we didn't notice that before... we'll have to shop it around... oh and rates have gone up .25% since we started this...
2 weeks ago - your loan is now going to start over and will take 4-6 weeks to complete. no thanks, we'll use someone else we are working with (they understand and will only take 2-3 weeks)
1 week ago - good news, your loan has passed processing but your PMI company sucks and needs documentation (wtf, but whatever and we get it within a day from the mortgage servicer) and you have comments on your credit report that say you disputed some accounts. These accounts are now paid/closed, but you need to get the comments removed. (WTF!) 

At the end of the day, we are now looking at another 4-6 weeks for our refinance to go through, if and only if comments (not actual disputes) can be updated. The idea of purchasing a new home is fading as my wife will go on maternity leave and we'll lose her income... 

A few takeaways for those in similar situations;
1. Don't list your home for sale if you want to refinance it.
2. If your home has PMI, and you want to refinance - make sure your lender knows this up front and is prepared to deal with it.
3. Be very cautious about cleaning up your credit, disputes can come back to haunt you.

It's no wonder people are walking away from homes...
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August 25 2012 - San Diego
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Replies (2)

hi,
Your takeaways are astute but it's always nice to have them reitereated.

I'll add to it.

If someone tells you your "refi should only take 3 to 4 weeks", run away.  It will take longer, if they lie to you up front it will only get worse.

Your PMI company sucks???  They're insuring an upiside down loan, if they want something then provide it.


we can't do both your refi and your home purchase loan.
====================
This one is strange. Why not? Are you moving to a state where the lender isn't licensed?


 The idea of purchasing a new home is fading as my wife will go on maternity leave and we'll lose her income...
=================
congratulations!  However, weren't you going to lose the income anyhow?


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August 26 2012
Sorry to hear of all the troubles. Each item you mentioned should have been noticed from day one if the loan originator would have simply taken the time to read the entire automated findings result. Maternity leave is not a disqualifying factor. If return date can be verified by employer and borrower the income received while on leave can be used to qualify. Disputes on credit can typically be removed in 3-5 business days with Rapid Rescore process. I am curious did you apply initially as primary or investment? If primary that would explain why you were told same lender can't do both loans. You should be applying as investment if you are actively seeking to purchase.
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August 26 2012
 
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