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Lender paid insurance for Fannie Mae loans under Making Homes Affordable?

My husband and I are attempting to reduce our mothly mortgage payment by any vehicle available.  We have excellent credit (above 720) and are current on all obligations.  My husband has experienced a decrease in income since the inception of our loan in 2007 (former mortgage broker).  My current lender, Bank of America (formerly Countrywide), states that I qualify for the Making Homes Affordable Refinance Program, however Bank of America does not know or have way to make it happen because of the lender paid mortgage insurance through our current Fannie Mae Loan.  Does this make sense to anyone?   Any insight would be helpful.  It sounds like a stall tactic to me. 
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August 13 2009 - White Marsh
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From what I understand, if your current loan has LPMI (lender paid mortgage insurance) you would still be eligible for the Fannie DU Refi Plus, but not the Fannie Refi Plus. 

The catch is that financed MI is subject to the MI carrier transferring coverage to the new loan.

This is one of the problems with the HARP loans.  Lenders are willing to do them but the MI (mortgage insurance) companies have been difficult to work with.  The MI provider is probably not willing to insure the new loan.

I think BofA is telling you the truth...
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August 13 2009
Profile picture for seven1111
I have the same issue.  I have LPMI and BOA will not re-fi my loan.  I had been trying to get them to re-fi for 4 months, and each time they tell me to call back that there is a new program coming out.  So the last answer I got was they can not do it.  I will never use BOA again!!!
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August 13 2009
Kelly is right when she says "The MI provider is probably not willing to insure the new loan." That is the biggest problem the REFI PLUS program is experiencing.

The other big hold up is the subordinations of second mortgages. In most cases I have been seeing the REFI PLUS loan approved if the homeowner originally bought the house with 20% down and has no second mortgage - no MI issues, no subordination issues.


 
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August 13 2009
Profile picture for Happy Owner
Thank you for your replies.  Glad to hear that BoA is being honest.  I think the reason I starting to feel deceived was that the rep at BoA did not explain it as well as all of you have.  I was told they (BoA) don't know how to do it, so therefor they weren't doing it, but that I could call the BoA 'experimental' team for assistance.

Lender paid mortgage insurance is not that uncommon.  I am surprised that such a matter could complicate things so much.  For the record, in our case, we owe less than the house is worth.  I don't think that our particular situation is that risky.  Although, I can see the hesitation to insure the home under a new mortgage.

Thank you again everyone for your insight.  Any other ideas for my husband and I to lower our monthly mortgage payment?  
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August 13 2009
Profile picture for dan30thz28
Hello,
           Happy, I'm in the same boat as you, except our home is underwater. We have excellent credit (near 800), our loan is backed by Fannie, but we have lender paid pmi (LPMI). Supposedly, there is going to be a provision made for (LPMI) loans to be refinanced under HARP, but my family probably won't see the benefit because I don't see rates staying this low, before the HARP program ends next June. I also called the 'experimental/pilot' group, and they told me they couldn't do anything with my LPMI loan. Hang in there, maybe BoA will do something soon.



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August 28 2009
Unfortunately what BOA is telling you is correct about the Making Home Affordable or HAMP program, if you have the PMI then you are not qualified for the program.  It is too bad for many homeowners.

The second unfortunate thing is that most of the new programs that allow you to refinance in your situation are having trouble getting the MI companies to also participate. 

I recommend keep checking back in hopes that something changes.
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August 28 2009
Unfortunately what BOA is telling you is correct about the Making Home Affordable or HAMP program, if you have the PMI then you are not qualified for the program.  It is too bad for many homeowners.

These programs do allow PMI and LPMI. Some lenders are on board with it and some aren't. We've been doing them since May for loans already with SunTrust.
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August 28 2009
Profile picture for drjgrahamdc
Tim,  are you saying that you've been able to do HARP loans with LMPI?  If so can you refi someone who is currently with Bank of America or does it have to be someone who is currently with SunTrust?
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September 25 2009
 
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Lender paid insurance for Fannie Mae loans under Making Homes Affordable?
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Latest reply by drjgrahamdc
September 25 2009 | 8 answers
  • Posted by Happy Owner
  • In Mortgage
  • August 13 2009
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