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Subordination fee

We are currently in the process of refinancing are mortgage to lower our payments.  We have a 1st and 2nd mortgage on the home, both held by the same institution.  We can't roll the 2nd into the 1st because of HARP rules (or so I'm told).  The lender wants to charge us $100-150 subordination fee to subordinate the 2nd loan to itself, something it already has.  This doens't sound logical or ethical to me.  Now don't get me wrong.  I don't think 100-150 is a lot of money to do this, the fee sounds reasonable.  But it only sounds reasonable if I was dealing with a 2nd lender.  Anyone have any input regarding this?  Thanks.
  • March 22 2012 - US
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Answers (13)

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I understand.  Now I'm starting to wonder if the bank is trying to mislead me.
  • March 22 2012
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I used the term HARP generically; yes technically HARP is Fannie Mae but in my context I meant Fannie or Freddie.
  • March 22 2012
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<i>Then you are not HARP eligible</i>

That's what I thought.  But I'm pretty sure he mentioned Freddie on the phone.  And it's costing us next to nothing.  Now I'm getting very confused.
  • March 22 2012
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When I do a search of Frannie and Freddie, neither of them shows as owning the note.
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Then you are not HARP eligible.
  • March 22 2012
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*Fannie* not *Freddie*
  • March 22 2012
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Mr. Plume,

When I do a search of Frannie and Freddie, neither of them shows as owning the note.
  • March 22 2012
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I had a request last week to pay Chase $250 to process an outside subordination request.  This is a very common practice these days. 
  • March 22 2012
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it's horse ****; the note holder is Fannie Mae or Freddie Mac; the story they gave you is just to blow smoke.

They should just fess up and tell you they charge it so they can a) make money or B) cover overhead or C) both.
  • March 22 2012
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Thanks guys, I thought it was odd.  Turns out the bank is just servicing the loans, they don't actually hold the notes anymore.  I had to inquire about that and once I found out it made more sense.
  • March 22 2012
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Ha, a thumb for the president. Have to admit I missed the part about same lender. 
  • March 22 2012
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seems odd when they hold both loans; I know we don't charge to subordinate to our own new primary loan. 
  • March 22 2012
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Think of it as an administration fee to complete the paperwork.
  • March 22 2012
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It is normal. The 2ND lien holder has to re-subordinate because once the first lien is paid off the 2ND lien would move to first position without re-subordinating. Some charge up to $300 so $100-$150 is not bad and will have to be done to get the first refinanced.
  • March 22 2012
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