You have probably heard by now about the Home Affordable Refinance piece of the President’s Making Home Affordable Plan. This was announced on March 4th of this year but we haven’t hear much about it since then. I think the reason for this is because these very large banks like Wells Fargo and Bank of America have had a lot of work to do in order to ramp up for handling all of the eligible borrowers that they service.
A quick Recap, the Home Affordable Refinance program is for borrowers who are current on their mortgage, who’s mortgage is held by Fannie Mae or Freddie Mac (which is a large percentage of conventional loans) and for those who are not able to refinance and take advantage of these historically low rates because the value of their home has declined and they cannot meet the loan-to-value ratios required by lenders to refinance. So if you owe between 81% to 105% of the value of your home, you may be eligible. Of course that is how the program reads and when these refinances actually start happening, we may hear a different story, but let’s stay cautiously optimistic. For more on eligibility, see my previous post ‘Want to see if you Qualify for the Home Affordable Refinance?’.
Back to the purpose of this post. My mortgage is with Wells Fargo and I spoke with them today about whether they had started doing these refinances or not. The representative I spoke with told me that Wells has been ramping up for this and that within the next three weeks, they would start calling customers who may qualify for the program. By “May Qualify” I think they mean that the loan is backed by Fannie or Freddie but that is just a guess. He told me that if I don’t hear from them by May 15th, to give them a call. That was all he could tell me. I have heard that Bank of America / CountryWide may be ready to start implementing the program now, or at least very soon, so if your loan is with them, give them a call.
What should you do if you have a mortgage that you want to refi but don’t have the equity to do so right now? Call your mortgage company and ask them. They will be able to tell you if Fannie or Freddie own the loan, and then tell you where they are with expediting the refinances.
Keep the Faith
[...] Home Affordable Refinance – Wells Fargo Update [...]
Not sure who you talked to, but Wells Fargo Home Mortgage rolled out the Home Affordable Refinance program on Monday, 4/6 and is taking applications.
I would have to assume they are just a little overwhelmed with application requests then if they are telling you that. There is also a number for centralized processing, though I am guessing call volume is high there as well. The number is on the Wells Fargo site: https://www.wellsfargo.com/mortgage/account/affordable_refinance
I have not applied, as I am not sure I will stay in my home long enough to make it worthwhile.
I just checked, Wells Fargo is indeed accepting the Home Affordable Refinance applications. Maybe your commenter Jeff is right–they may be overwhelmed or something. Who can blame the people anyway, it’s not like there’s plenty of trustworthy home-saving options since the number of scams and frauds have upped in the past few months.
Thanks Imee. Were you able to make an application? I’d love to hear about people’s experiences with the process. I’m told it is little to no cost to do the refinance, but the person I spoke with could not tell me how long the process took, if an actual closing takes place etc… Thanks for the comments!
I spoke to Wells last week for a second time to find out my eligibility under 31% modification. The initial time they took brief notes on my situation to provide to “modification dept.”. The second time, the rep I spoke to said I was in their queue for them to call back to discuss modification once Wells has been funded by the government. I will continue to call weekly until I hear otherwise. What more can you do but be vigilant?
My Loan has a In-Built Lender paid Mortgage Insurance. I do qualify for this program. but they told me they haven’t yet figured out the process how to handle loans with Mortgage Insurance. So I was told to wait for another 2 weeks.Also, it is much better to contact the local WellsFargo Agents in your area. That way, you may get some personalized attention, compared to the national toll free numbers
Thanks for the comment Adam. This is all new to everyone, but in my experience dealing with Lenders in regards to negotiating Short Sales, constant follow-up is what works best. The squeaky wheel get’s the oil. Let us know if you get anywhere, I still have yet to speak with someone that has actually had success with these programs, but I know we will start to hear some success stories soon.
Thanks Kumar. I did hear from one of the mortgage professionals that I work with that the Mortgage Insurance issue was still fuzzy for these lenders. Good tip on finding local Wells Fargo agents. In your discussion, did the contact at Wells say anything about fees to refinance?
I have a loan from BOA, loan is held by Fannie Mae, I am current on the loan, the government site says that I am eligible; BOA says I am not eligible, when I asked why, they say, they don’t know, their software is saying I am not eligible(what a lame answer).
Raj
I got through and was able to make an application on Friday. Check out the answers to the questions that I finally was able to get: http://blog.mikeminihan.com/2009/04/24/update-on-wells-fargo-home-affordable-refinance/
Mike – Thanks for the info but does this have anything to do with the “Making Home Affordable” program? There are zero out of pocket costs for the MHA program. It sounds like you just applied for a refi which you could do anytime.
Anyone have any luck in a MHA Modification with WF yet? Making my next call to WF tomorrow(4/30) when I have time.
Hmmmm, so I guess the modification program is 100% free but there can be up to $2500 fees for the refi?
I took the approach of 1st making an in-person visit to my local Wells Fargo office and this is what I was able to find out.
My home mortgage is two years old, I owe 300k @5.875%, my property value is roughly 350k, and my loan is backed by Fannie. The rep was ready to take my application today for a re-fi @ 5% for 30 years and roll the roughly $2600 closing costs into my new loan for a savings of approximately $260 per month. Also, and this is the important thing, their doing re-fis right in the office up to 105% of the property value in case you’re upside down and your loan is backed by Freddie or Fannie per the government program guidelines. Easy.
Instead of that, I’m opting for the Home Affordable MODIFICATION. I just got off the phone with Wells Fargo and they’re taking applications over the phone provided you have all your financial information ready. Since I don’t, I’ll be faxing it over. Here are the steps to get this done…
1. Call the customer service phone number @ (800) 288-3212, NOT the phone number on your statement and tell them you want to apply for the Federal Home Affordable Modification Program. They’ll transfer you to the Borrower Counseling Department, but here is the direct number they gave me in case we got disconnected … (800) 416-1472.
2. Speak to the rep. and they’ll answer all your questions.
3. Have ready the following information…
(a) An itemized list of all your monthly expenses
(b) Proof of income for the past 30 days (pay stubs)
(c) A letter of explanation as to why you’re applying for assistance.
(d) Your most recent tax return.
I didn’t have all this information ready but I’m going to send it via fax to (866) 359-7363, Attn: Loss Mitigation Dept. I have to sign and date the list of monthly expenses, and the letter of explanation why I’m applying for assistance. And lastly, the loan number needs to be on EVERY page.
Once you fax all this information in, you’ll be assigned a representative within 45 days. After that, they’ll determine whether or not you qualify. I was told by the rep the entire process is taking somewhere in the neighborhood of 90 days to complete. After the application is submitted, the rep also told me that I can call (800) 416-1472 every two weeks for status updates.
Hope this helps.
Thanks for the Comment Jeff. I spoke with one of the loan reps that I was directed to when I called to make an application for my own loan and that was what he told me. He said that they would be calling those who where eligible over the next 3 weeks and not to call back unless I hadn’t heard something by May 15th. Have you had success actually making an application with Wells Fargo? I have yet to hear from a person that has successfully refinanced their home under the Home Affordable Refinance Program with any bank and I’m anxious to hear some success stories!
I too aproached wells fargo about an affordable home refi program. owe 203,000 on a 209,000 balance to
citimortgage (fannie mae conventional loan).
Wells Fargo said they may get back to me. Have
not heard from them. Anyone else out there have
any response yet?
Raj – You’re right, that is a lame answer! I would not settle for that. You do deserve a real answer for why you are not eligible and if its me, I would continue to press them on the issue. Maybe it means calling a local B of A branch like Kumar suggested, or at least insisting that you speak to a supervisor. Keep in mind that these programs are as new to the banks as they are to the rest of us so they are trying to figure this out too. Obviously the person you spoke with does not know what they are doing yet. This is not an automated system, so “the software says no” is not going to cut it. Keep trying until you get a real answer, and let us know if you get anywhere. Thanks for the comment!
Thanks for the comment Doug. The ‘Making Home Affordable’ plan has two Separate components or options. Loan Modification OR Home Affordable Refinance. The Loan Modification is for people who are already behind on their payments as well as those who anticipate a financial difficulty or hardship. This may be due to a loss or decrease in income, a rate that has adjusted higher on them and has made it impossible for them to afford to pay the new payment, and I’m sure a number of other factors that would be considered a hardship.
The second component, or option is the Home Affordable Refinance which is what I have been commenting on. This is for people who are current on their payments, but who want to take advantage of today’s low rates, but because property values have declined so much, their loan to value ratio is too high to refinance the traditional way. For example, let’s say you made a 10% down payment several years ago when you purchased your home and got a rate 6%. You decide that since today’s rates in the mid to high 4′s are much better and you would like to refinance to today’s rate. The banks use underwriting guidelines when they qualify you for a refinance that can require anywhere from 5% equity to 20% in your home. If your home declined in value by 12% since the time you bought it, then your loan to value ratio is now 102%. Banks will not finance a house, under their conventional guidelines if the loan-to-value is higher than 95% so that borrow is out of luck and cannot refinance to today’s rates. This is where the Home Affordable Refinance piece comes in and says that if your loan is backed by Fannie or Freddie, and due to property values dropping, you cannot qualify for a traditional refinance because the loan to value is too high, then this program will allow you to refinance as long as your loan to value is not higher than 105%.
I have not had any experience with the Modification piece of this, only the Refinance piece. Does that make sense? I too would love to hear about if anyone has been able to do the Modification component. You will be required to prove that you have a financial hardship for the Mod though. With the refinance, no hardship is required, other than the value of your house being less than what when you financed it originally. I know that is long winded but does it answer your question?
Not sure if there are any fees with the modification. The refi fees will be like the normal refi fees it seems and Freddie Mac will allow up to $2500 to be rolled into the loan. These fees I’m told are based on the loan amount though, so Freddie might only allow you to roll in 50% of the closing costs.
check out the wells site for more explanation: https://www.wellsfargo.com/mortgage/account/stabilityplan