Frustrated in the waiting of refinance (PMI, home loan, credit score, loan)

[tfchaitf]

Applied for refinance at the end of March through a mortgage broker. Documents were complete right at the time and the appraisal was done 10 days later. Waited 1 month, then called several times after that and was told to be patient since everything is slow now. In mid-may, called and told it was proved but still need additional bank documents. Provided that right away. Still no news after almost another month. Broker still asks me to wait ...

I am really frustrated. Have anyone waited this long (2.5 months & still counting)? Should I pass the broker and contact the bank underwriter directly?

[AndrewSoss]

Really hard to say without seeing the facts.

The longest part right now is the time from submission to approval. If you already have approval, it should go relatively quickly from there. That makes me think one of two things:

a) your broker let the ratelock expire and he's waiting for rates to come back down

b) your loan has some issues that is preventing final approval

In any case, you should be in contact with the broker to find out exaclty what the holdup is.

Good luck.

[Modification Specialist]

Originally Posted by tfchaitf

....... (2.5 months & still counting).......

Broker vs Bank?........

We brought our home in 1992, it took about a month to close. Ended up getting a WaMu loan. Credit score 700's 10% down. Got 7.5% loan with PMI.

In 2003 went back to the same broker, it took us 6 months to close. Only used wife on loan (one income), since my credit score was bad.

At this time, found out we were still paying the PMI to WaMu. I found out as the value went up, so did my equity. WaMu said it was my responsibility to notify them to have the PMI drop off. I paid PMI for several years $125 a month, only to find out they would not return it....

2009 February refinanced again (using the same broker), took four weeks. Two incomes(we both have high 700 credit scores). Got a 4.5% fixed 20yr 80% LTV.

The time it takes to close - depends on the risk, having a high score, a low LTV, and a good DTI ratio. Will only help speed up to process. Having a lower score, a high LTV & DTV ratio, will add to the time to close your loan.


Good Luck....

[chet everett]

I disagree.

Lenders have no incentive to "slow down" refi's solely because of the qualifications of the borrower, nor would it make sense for them to "fast track" funding of refi's for particularly strong borrowers. You just lukced out that the lender was not busy this Feb (few were, as that would have been before the rescue plans went in effect: Obama launches mortgage modification program - Apr. 15, 2009) In 2003 that was on the "ramp up side" of lenders building their systems and staff.

What I have seen is a mortgage business in shambles from top to bottom. The number of originators ballooned and has shrunk and grown again, as have the staff to process those apps, as have even the investor sources. That last bit is the most troubling...

The recent dip in rates SWAMPED lenders and they did some triage to try and put NEW HOME SALES on the top of the heap. That meant refi's went to the bottom, if those refi's were locked and the funding sources have now dried up as they have their fill of new home loans the lenders are in a pickle -- people want what they don't have, cheap money.

Now in the broad sense there is still a lot of cheap money available for some things, Honda May Borrow About 100 Billion Yen for Car Loans (Update1) - Bloomberg.com (I think I'd like to be a Japanese automaker if I could borrow at 0.24%....), but the normal pools of dough for home loans are highly constrained by lenders whacky over reaction to years of "lend to anything that looks like it is still breathing"...

Basically mortgage servicing companies are part of a pipeline. Some of the money that they use comes from funds they earmark for new homes, other for refi, and others from restricted sources like FHA. When their risk managers and regulatory people see they are sending too much new business into one area or other they actively redirect the workload so that they can keep a handle on the profitability, insurability, and quality of these loans. Lack of oversight in all these areas are what shut down the IndyMacs and Countrywides...