The Chase HARP Program. Is This Correct?

Hello,

I have a 1st mortgage (Freddy) in the amount of $117,000 through Chase.  I have a second mortgage through another bank in the amount of $57,000.  My home is valued through Chase at $136,000.

Chase will refinance the 1st mortgage through their HARP program but I was wondering if the rate they are giving is normal for my high LTV?  I was expecting it to be the normal conventional rates but perhaps they charge higher interest rates for a higher LTV?  Chase quoted me yesterday 4.625% on a 15 year Fixed.  I currently have a 30 year fixed at 5.625%.  I also have a credit score of 720.  The total closing fees are also just over $3,000.  Since it's a Freddy Loan it appears I'm stuck with Chase...  I spoke to a banker at Bank of America and they seem to think that Freddy should be charging conventional rates but he wasn't sure about a loan with that high of LTV.  I'm thinking since I plan on living here for over 3 years I should refi, do you have any advice for me? 

Thank you for any help you can provide.  Have a great day!

Lenny
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November 19 2010 - Tampa
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Answers (13)

I have a 1st with Chase for 166923.00 and a 2nd with Chase for 72470.00 Chase valued the house now at 237k and offered a Harp refi on the 1st only at 5% with 6700.00 closing costs,no apprasial saving me 200.00 per month on the 1st payment?my credit scores are in the mid 700 range?
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June 21 2011
Profile picture for big jim2
try contacting your second lender and ask them if you can refiance with them on both notes at there best rate there by puting them in first postioning of your loan which will protect them in there first postion  most second lien holders lose out in second postion if you go into default sincrely big jim
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April 28 2011
Profile picture for bkubp01
I was under the assumption that with HARP  Chase gets paid for all closing fees by the govenment...that's the purpose of the program.  It seems to me CHase is simply offering a refi with a bit lower interest rate.  Banks will BS you about LTV...considering they caused the mess to begin with they should offer you a better deal.  Do a bit more research..mortgage brokers have become car salesmen...don't know who to trust these days!
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April 25 2011
Hi,

Sounds like chase is raising your rate to absorb additional fees. The HARP programs can be expensive, especially if you have a second mortgage. Freddie Mac charges additional fees based on the high LTV and the presence of a second mortgage. I would ask Chase what 0 point rate is and the total fees. Only then can you make an accruate assesment of whether it is worth it.

I agree w/ Lenny about checking with your current 2nd mort servicier as to what their max combined loan-to-value is.

We provide HARP loans to 125% of the current value of your home.
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November 26 2010
lenny, i would not have an appraisal performed until you speak with someone at the bank who holds your second mortgage. u need to ask them what is their maximum combined loan to value. it would be a shame to spend $350-400 for an appraisal then find out the bank wont subordinate. and just because u are doing a harp loan doesnt mean they are gonna subordinate.

as for chase telling you about the risks of subordination, that loan officer isnt going to say anything to you that would jeopardize taking your loan application. dont assume that just because he or she works for chase that they are looking out for your best interest and the best interest of your wallet.
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November 21 2010
For the subordination, calling Chase isn't going to help.   Call whoever holds your second mortgage, ask them to send your their subordination requirements.

Second lien holders are strongly encouraged to re-subordinate to all HARP/MHA refinance requests, but it it is not mandatory so best you find out in advance what their stance is, especially considering the very high CLTV.
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November 20 2010

Chase has not performed an appraisal.  Supposedly that is set up for next week.  The value on the house was done through some computer program I assume.

Chase is aware of my 2nd mortgage so I'm hoping they would have told me about the risks about subordination.  I have a call into them to get this figured out.

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November 20 2010

has chase already performed an appraisal on your home? if not, how are they arriving at that value?

also, i cant stress enough how important it is to make sure the second lien holder will subordinate to the new first mortgage. a client of mine who is with chase tried to do a freddie harp refi at 100% CLTV, and the second lien holder, fifth third bank, would not subordinate. end result, no loan.

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November 19 2010
Thanks for all the answers guys.

I do feel lucky to be getting a loan at such a high LTV, I was just wondering if the percentage and closing rates were too high for the standard high LTV refi.

I have contacted a few banks and it appears no one can touch the Freddy loan that is currently serviced by Chase.

Might you know of a lender that I could contact?

Again, thanks!
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November 19 2010
Profile picture for wetdawgs
As you owe $174,000 on a house valued at $136,000, you are lucky to be offered a refinance at all as your loan to value ratio is 129%.  

Your calculations on LTV seem to be ignoring the second mortgage.   The lender will see the second mortgage and recognize a huge risk, so will charge a premium on the interest rates (and yes, they are allowed to do so).





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November 19 2010
that rate sounds a little high for a 15 year loan, even under the harp. your rate should be in the mid to high three's. also, u are not stuck with chase just because u have a freddy loan. there are lenders out there that will do your loan other than chase.

the problem you may run up against is getting your second mortgage lender to subordinate your second at such a high cltv. i would contact them for guidelines. just an fyi, i was a chase preferred broker here in tampa until they left the wholesale channel two years ago.
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November 19 2010
You can go elsehwhere with your scenario.   The high CLTV does result in an adjustment, but still 4.625 with 3,000 for 15 year loan is not a great quote.

Large bank retail origination is generally not the most competitive available.

You should also check with your second lien holder about resubordination, to make sure you will not encounter resistance there.
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November 19 2010
It is pretty common for lenders to add a "risk premium" to the rate for higher combined loan to values.  I know we have slightly higher rates for HARP loans with combined loan to values (first plus second) over 95%. 

The rates are still conventional rates, but there are add ons for fico scores, loan to values, etc.  In your case (and most HARP refis), there are add-ons for LTVs.

I hope this helps.
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November 19 2010
 
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