Profile picture for user0216053

LPMI

I got my current mortgage in 2006 with an interest rate of 6.875 with the understanding that the lender would pay the MI. I agreed to a higher interest rate for the lender to pay the MI. I was exploring refinancing through HAPR recently and found out that neither the original lender (TBW) nor the current serrvicing agency (CENLAR) ever paid the MI. In other words, they have been getting the money from me over the years by charging the higher interest rate, however, they have not done their part. Because of this, I am not eligible for HARP refinancing. What can I do to fix this? Shouldn't they pay me back what I have paid extra over the years for the lender to pay the MI? Any guidance on this issue will be greatly appreciated.
Thank you,
Yasar Bodur
  • October 26 2012 - US
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Answers (7)

Profile picture for michaelmccollum
Yasar, sounds like Justin has had experience with HARP and LPMI and I would trust what he is saying, but based on what you are both saying, I think your path of least resistance to start saving money is to punt on a HARP deal and try to refi with either an FHA loan or a 95% conventional. You should still save quite a bunch with either of those options. As for estimating value, I recommend going to Redfin.com as it will show you recent sales around you and you can compare number of rooms and square footage. Hope that helps.
  • October 27 2012
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Profile picture for user0216053
The loan was sold to Freddie Mac sometime in 2006. Currently I owe 204000 dollars and zillow shows the market value as 218000 dollars.

Going back to my question. Isn't there a way to hold the lenders accountable for what they did in my case (not pay the MI despite us paying based on a higher interest rate)? I am so frustrated with this situation that I feel that they should not be able to get away with this.
  • October 27 2012
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Michael LPMI isn't Yasars problem there are plenty of banks that accept LPMI transfer. His problem is the initial bank never even bought the policy and told Fannie Mae it did. TBW got an LPMI commitment and certificate number, sold the loan to Fannie representing it as insured and then never paid the insurer. Fannie Mae thinks it is insured and in reality it isn't.
  • October 27 2012
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Profile picture for michaelmccollum
Yasar, I know it is frustrating, but my experience with HARP and LPMi is that it is still a hard loan to get done. I have worked at two of the major banks since HARP came out and loans with LPMI were not eligible. That may have changed with HARP 2, but not likely. I am still curious about your level of equity. If you have a small amount or if you can create a small amount by bringing some money to the table, refinancing to an FHA loan or a conventional with PMI at these current rates should still be very beneficial compared to your current rate.
  • October 27 2012
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Profile picture for user0216053
Thanks for the responses. Isn't there some type of accountability for the lender. It just does not feel right that I have been paying based on a higher interest rate for the lender to pay the mortgage insurance and they have not paid anything for 6 years.
  • October 27 2012
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I have run into this issue before and was unable to solve it. Cenlar would have to request update to Fannie Mae records to reflect the termination of MI on file however doing so would expose them to a repurchase and you have an uphill battle there. If your Loan to Value is low enough you might be able to obtain a NEW MI policy to attach to your HARP refinance, that will be your best angle to explore in light of the dilemma. TBW was a very irresponsible lender.
  • October 26 2012
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Profile picture for michaelmccollum
Do you have any equity at all or do you have the ability to put some money down to create enough equity that would allow you to refinance?
  • October 26 2012
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