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Profile picture for morleda

Why won't any of the HARP programs help those with a conventional mortgage?

I put 20% down in 2007 and got a loan with Wells Fargo. My credit score is 850 on the 850 scale. My APR is at 6.5%, and nobody will refinance me because Fanny or Freddie don't hold the mortgage. I'm underrwater, and I retired last year. I can't afford to keep paying at 6.5%. I feel like I'm being discriminated against. Nobody ever asked me who I wanted to hold the note. All my friends have refinanced several times, and I can't even do it once! Any ideas???
  • October 07 2013 - San Jose
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Answers (9)

There is (was until the shutdown), talk about expanding HARP to allow for non-FNMA and FHLMC loans to be included in.  If HARP 3.0 goes through as discussed, there could very well be an option for you to refinance.  

Contact your congressman to support HARP 3.0 (assuming someone is answering the phones!!)

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  • October 10 2013
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Profile picture for SteadyState
As frustrating as this sounds I believe you need to look at the situation from a more objective point of view.
In 2007 you borrowed money from Wells Fargo at an interest rate of 6.5%. Say you borrowed $500K. Using back of the envelope calculations Wells Fargo receives $32.5K in interest payments alone per year. (Think of this as the rent you pay Wells Fargo to live in the home).
Wells Fargo held their end of the bargain - they lent you the money. Now because your gamble on your property did not pay off why should they loose $32.5K per year. They will not and should not. No one else will refinance because they would have to pay Wells the equivalent of $32.5K per year.
If your property would have shot up in value or your income tripled since 2007 would you pay Wells Fargo 8.5% in interest? No. You would not.
When you invest there is risk and there is reward. You learned about risk and reward the hard way.
I have empathy for you but have no sympathy for the transaction. You made a bad bet.
  • October 07 2013
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I agree with you 100% this is a very tough situation!

First, The HARP loans are meant to specifically help those with conventional mortgages that are underwater. However as you already stated those HARP programs only extend to the loans held by Fannie or Freddie.

Asking WF for a loan modification is going to be your best bet to get results. Some banks can offer a balance reduction, others may offer a rate reduction... Some will offer both!
  • October 07 2013
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As stated below, try a loan modification through Wells.

Depending on how underwater you are there may be some options for you. Some programs allow for higher loan to values "LTV"

Until the HARP 3.0 comes out, there is nothign more that can be done unfortunately. The 3.0 will help borrowers that are in your situation refinance under HARP even if the loan is heald by Fannie or Freddie. I myslef, and I am sure most loan officers, have a spread sheet of borrowers who will benefit from this and IF and WHEN it comes into effect, a lot of people will jump on board. hopefully first quarter of 2014 but no one knows for sure.

Hope this helped an best wishes!
  • October 07 2013
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Hi Morleda,

Feel free to reach out to me via my profile and we can take a look at your situation to see if there are any options.

Best,

Bryan
  • October 07 2013
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In 2005 through 2007 lots of loans that could/should have been done to Fannie Mae or Freddie Mac guidelines were instead done as "Alt A" which was a product designed in part to fast-track loans with lesser documentation.  

Most areas of CA have seen a nice rebound in market value over the last 6-12 months.   WIth 20% down in 2007, you might not be that far off on having enough equity to qualify through traditional methods.   Depending on loan balance and other factors, financing to 95% of current value is often beneficial even with mortgage insurance added.    If you are close but don't quite fit, perhaps liquidating other assets to bring into closing could be considered if you had enough payment reduction waiting for you on successful refinance.
  • October 07 2013
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Profile picture for cassandraevers
You can try to contact Wells Fargo for a Loan Modification...worth a shot! 1-800-678-7986  Good luck!
  • October 07 2013
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Profile picture for daveskow
1) Have you contacted wells fargo  to see if they have any options ?

2) possible to pay the loan amount  down to a level slightly below the present value to  complete a " normal " refinance ?

3) consider selling  via a " short sale " premise
  • October 07 2013
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Profile picture for Brian GFL Capital
The loan scenario basically comes down to who assisted with your loan in 2007 and what loan program you qualified/were put into back in 2007. if the loan happened to a Fannie/Freddie guideline qualifying loan program then you lucked out and more than likely qualify for a HARP loan.

Stated income versus Full documentation could have played a part or countless other guideline qualifiers outside of the 20% equity. it sounds like equity and credit were not a problem so i can only assume that income might have been the reason behind the loan being Fannie or Freddie.

its also possible that the loan itself doesnt qualify due to loan size high balance/Jumbo loans were less likely to be Fannie/Freddie
  • October 07 2013
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