Profile picture for user5014575

Lender messed up my FHA Streamline refi. Do I have recourse?


Hi,

I applied for FHA Streamline refi right after making the 6th payment in March. Loan settlement was 8/12/11, first payment was 10/1/11. I was told by LO it was OK to obtain new case number then as I satisfied the requirements. I was really hoping to beat the 4/9 increase in UFMIP and monthly MI. Plus rates I offered was .75% decrease in my current rates. So that was great!

This was 3/5/12 when refi started. Promises after promises, at this time it was already 6 weeks and still wasn't closed. I called again and found out that FHA did not approve as the case number was pulled out too soon!!! There was plenty of time between 3/5 to 4/9 (when it should have been completed) to find that out!!

So now the I'm out of luck. Now, the only resolution as I was told was to (a) do the 'regular' refi w/ appraisal (b) pull out a new case number. Either way, I will now be paying increased FHA Fees!

Do I have a recourse? Is it Lender's fault, UW, or FHA?

I'm just so furious! I did everything to give all info promptly!

Thank you.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 22 2012 - San Diego
We think we've answered this question for you!
 
 

Replies (17)

Did you talk with your Lawyer? Regards,
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 22 2012
What is the loan balance, estimated value, your credit score?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
Any FHA clients I had coming against that deadline hounded me daily until I emailed them the new case number as proof it was ordered. I assume you did the same. Did you think to escalate it when the LO wasn't responding?



  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
Profile picture for user5014575
No I did not specifically ask for the case number. He mentioned several times that it was ordered.  The reason for the problem he said was that it was ordered too soon.  In researching about streamline refi, I read that aside from 6 payments, there's also the 210 day seasoning.  Is this correct?  If this is the case then 3/12/12 would have been my 7th month on the loan.
Why weren't this caught early on though?  Specially by the UW.  Can I still fight for it?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
I have no idea if it can be applied retroactively if you were within the minimum seasoning time frame since I have never tried that, my guess is no. Maybe the Prez can shed light on that. If it can not be changed then it sounds like your lender planned to do a rate & term using an appraisal which would require at least 2.25% equity so if that is the case do you have 5% equity? If so, you are better off refinancing into a conforming loan if your credit scores are over 680.   
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
I don't see how it could have gone to underwriting without a case number; the date of the case number, and thus the premium, would have been critical items in underwriting the file.

By this, I mean there's nothing for the underwriter to catch. There was likely a case number at that junction.

LOs aren't underwriters, the great ones are proactive and catch things right away but it's not a requirement so others just shuffle it to underwriting and wait.. EVERY lender has good and bad LOs. 
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
You don't have to pull a new case number if it was pulled prior to the increase date.  You need to contact the lender, and have your old case number transferred to the new lender.  You CAN transfer case numbers, and case numbers are typically good for 6 months.  

If you need help let me know...

Daniel Lehman
[phone number deleted by Zillow moderator. Please see our Good Neighbor Policy for more details.]
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
I think the OP is stating there was no case number pulled before the MI increases so nothing to transfer.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
You can try writing a letter to HUD but I doubt it will do much good. 

Since your previous FHA loan was only 7 months ago, you MI increase on the post April 9 case number won't be as drastic.  You can hopefully still make the required Net Tangible Benefit.   The monthly MI will be only .10 more than if you got your case number in time, and the UFMIP .75 more.

Your "recourse" is to get the lender to do your loan with low/no profit built in (to make up for their mistake), and to give you a credit to pay your UFMIP as well.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
Profile picture for user5014575
Purchase price was 325K, 3.5% DP and this was in Aug 2011. Prices have been dropping so, hence streamline was my best scenario. 715 credit score.

So if there is truly the 210 day seasoning, and if case number was pulled prior to 3/12/12 (my 7 month of having the loan), then it could certainly be pulled too soon.  The fact that it took them 6 weeks to find this out is what infuriates me!

I'm asking from LO for the case number to find out exactly when it was pulled (if any at all).  I don't know if I will ever get response.

He (the LO) told me that we go for option (b) (pull a new case number), then he will 'ask his manager' to add lender credit equal to the 0.75% increase in UFMIP and they will still honor the rate I was promised although it's been nearly a month since lock-rate expired.  That was Thursday.
So question is - will a lender actually do that? what's in it for the lender to spend extra to move on with this?  I have a feeling that he's just putting out broken promises now until I get tired and give up.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
What is in it for them is their reputation for "making right" on an obvious error they made.    For example, if their projected profit on the loan was 2% of the loan amount, they could make some concessions to attempt to honor what they initially offered you.

There is nothing they can do about the .1 monthly MI increase, however if they can honor the locked rate, and pay the UFMIP increase for you, they would be getting close to doing the right thing.   I'd also push to get a closing cost credit for 60 months worth of the MI increase (~1600).

If you have an incompetent originator, you probably want to get him/her out of the picture and deal directly with management.
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
Have you tried contacting the FHA Home Ownership Center? That is where the lenders go with any FHA related matters and you're welcome to contact them as well. Here is the California Santa Ana Office number 800-225-5342. Hope that helps!


Best Regards,
Ekta Patidar
REALTOR (R)
DST Capital Investments Inc
Licensed in CA, #01859888
Cell: 925-998-7391
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012

I second the earlier post by Justin.  The lender should be able to credit you for the mistake.  If you have lost trust in this lender, try another. They should be able to offer a loan in which they can credit the up front or closing costs or maybe even both.

  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
I second Matthews second. Justin's remedy is perfect including the increased annual MI.    
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
Profile picture for user5014575
Thank you folks for your response and guidance.

I think I will negotiate for the lender to include ~1600 in (to be incurred) fees in addition to LO's offer of .75 credit.  Who should I contact? The "manager"?

On the other hand though, having experienced nearly 2 mos of terrible customer service, I don't know if anything good will come out of this re-do.  I'm not sure if they will even work on it, or will just drive me nuts and finally leave them alone!

If I do approach another lender, I am pretty much just a new client to them, correct?  Does Matthew imply that I can be "special case" to the new lender and will get a "better than publicly offered" rates/fees?
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
If you decide to apply elsewhere, you should not expect any "special treatment" as that lender was not party to your prior application.   

What is your existing interest rate?   What new rate had you locked and at what "adjusted origination" amount on your Good Faith Estimate?

I'm in San Diego, I'd be happy to give you an estimate of what is currently available for Streamline to use as comparison to what the prior lender offered, feel free to contact me through my profile.

You obvioulsy don't want to reward atrocious service on your existing application, however since you were harmed by their apparent errors, you might find that pursuing the options already mentioned could yield you the best possible loan as compared to starting somewhere new.   
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
On the other hand, if Justin's lender credit is a point higher than those other folks you can have your cake and ....
  Flag content
Close
Report a Problem

Please enter a valid email address.

Close
Content flagged

We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

Close
We're Sorry
This service is temporarily unavailable. Please come back later and try again.
April 23 2012
 
  • Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.
Related Discussions
subordination process
Profile picture for Sinead  McAllister
Latest reply by Sinead McAllister
May 11 2013 | 2 answers
  • Posted by user2686134
  • In Refinance
  • May 10 2013
HARP Refinance Nightmares?
Profile picture for Justin Sheftell
Latest reply by Justin Sheftell
August 26 2012 | 2 answers
Lender messed up my FHA Streamline refi. Do I have recourse?
Profile picture for Clay Branch
Latest reply by Clay Branch
April 23 2012 | 17 answers
  • Posted by user5014575
  • In Refinance
  • April 22 2012
Independent Mortgage Broker needed
Profile picture for Clay Branch
Latest reply by Clay Branch
December 27 2011 | 8 answers
  • Posted by Wendy T.
  • In Refinance
  • December 26 2011
This does not reflect well on the mortgage lending industry.
Profile picture for SoCal Engr
Latest reply by SoCal Engr
June 18 2011 | 29 answers
  • Posted by SoCal Engr
  • In Refinance
  • June 16 2011
Mortgage Rates
 
Be A Good Neighbor

Zillow Advice depends on each member to keep it a safe, fun, and positive place. If you see abuse, flag it. More on our Good Neighbor Policy.

Homes for Sale
  1. 604 Coastal Hills Dr, Chula Vista, CA Home For Sale
    604 Coastal Hills Dr, Chula Vista, CA 91914

     For Sale: $915,000

    • Beds: 3
    • Sqft: 3189
    • Baths: 3.5
    • Lot: 22651
  2. 6384 Lake Albano Ave # 0, San Diego, CA Home For Sale
    6384 Lake Albano Ave # 0, San Diego, CA 92119

     For Sale: $10,000

    • Beds: 3
    • Sqft: --
    • Baths: 2.0
    • Lot: --
  3. 5652 Dartford Way, San Diego, CA Home For Sale
    5652 Dartford Way, San Diego, CA 92120

     For Sale: $625,000

    • Beds: 4
    • Sqft: 1764
    • Baths: 2.0
    • Lot: 8276
 
 
 
Sign in with Google