Has anyone successfully exercised a conversion option from ARM to FIXED with Wachovia this year?

Rob Robertson, "Mortgage Broker"
- 0.0/5.0
Contributions:169

I was just wondering if anyone has successfully exercised the conversion option (from Adjustable to Fixed Rate) that World Savings used to offer on the former "Pick-A-Payment" mortgage?

I have brokered a few World Savings loans, in the past. As I recall, once your prepayment penalty period had expired (or 1 year seasoning, with no prepay) up until your 7th year you could pay a "conversion" fee of $200 and convert from the adjustable rate to a FNMA 30 year fixed. Only stipulation was the mortgage payment history had to be perfect; you would get the 60 day FNMA pricing, plus .55% to the rate, and then your loan would be converted and then sold to FNMA with no other fees or escrow required.

I received a call today from someone who has been trying to exercise this option with Wachovia since December. She's fed up of waiting as this is the 4th month and Wachovia is stalling (loan is still in Underwriting, so she is told). They made her re-appraise her property (at her expense) and her LTV is well under 40%LTV.

Any comments would be appreciated and very helpful for all those who are interested.

Thank you!

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March 12 2009 - US

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Replies (2)

Stephen Ching, "Edmonds WA"
- 4.8/5.0
- (4 reviews)
Contributions:229

From my memory the conversion feature changed a few times. It was normally selected at origination by the originator. At some points it was $200 extra origination fee, at others it was only on selected margins/products. She needs to look at the original loan documents she received at escrow.

Regardless, if she is full doc at 40% ltv with clean mortgage history she may as well just do a normal refinance. APR's are typically less then .55% above FNMA 60 on a refinance.