Prepayment penalties and HARP (loan, refinance, loan, lender)

[Freebird2007]

Does anyone have an answer to this? Currently I am not behind any payments nor have I been. I am underwater like most Americans as I bought my house in 2008. Question is, my loan thru BofA has a prepayment penalty clause in it. If I refinance the loan or go thru another lender then I will be charged $7500. Does anyone know if the new HARP program will prohibit lenders from charging this penalty?

[NJBest]

I don't know the answer to your question specifically... but you have an incorrect fact that is worth correcting. Most Americans are not underwater with their home.

[Matt Kim]

I was under the impression that HARP and HARP II were simply your current lender reworking your loan?

[dad2jules]

You may have had a pre payment penalty on your loan originally but 3 years is a long time for it still to apply - check how long the prepay was for in your original Note.

[Freebird2007]

Originally Posted by Matt Kim

I was under the impression that HARP and HARP II were simply your current lender reworking your loan?

thats what I thought and was hoping the prepayment penalty would just go away.

[mortimer]

Originally Posted by NJBest

Most Americans are not underwater with their home.

Right, it's about 1/3rd of mortgages that are underwater.

Probably, nearly half of all homes have a paid-off mortgage.

I would imagine that nearly half of all homes purchased in the 2003-2008 period are under water.

When I hear the statistics, I also wonder how they are calculated.

For instance, if I have a house with a $400k mortgage that is worth $410
( assume I know this for a fact ) then I have an underwater house once
selling costs are considered. It shouldn't be a problem for most people,
but I would call that $410k house with a $400k mortgage under water.

Most of the people in my neighborhood are retired, well-off, and have
mortgages. I just don't get it. ( A home should be paid off before
you retire, but I guess that this is the "new normal." )

[Freebird2007]

Originally Posted by mortimer

Right, it's about 1/3rd of mortgages that are underwater.

Probably, nearly half of all homes have a paid-off mortgage.

I would imagine that nearly half of all homes purchased in the 2003-2008 period are under water.

When I hear the statistics, I also wonder how they are calculated.

For instance, if I have a house with a $400k mortgage that is worth $410
( assume I know this for a fact ) then I have an underwater house once
selling costs are considered. It shouldn't be a problem for most people,
but I would call that $410k house with a $400k mortgage under water.

Most of the people in my neighborhood are retired, well-off, and have
mortgages. I just don't get it. ( A home should be paid off before
you retire, but I guess that this is the "new normal." )

I would think that most people who bought a house during 2003-2008 would be underwater unless they paid more than 30% down payment.

We bought a house in SoCo for $560k. Its been recently appraised at $410k. Our loan is for $430k....so yeah, underwater.