Question about mortgages please advise?

Question

I very upset with my mortgage company. 1 year ago they gave me a courtsey call telling me i have 45k in equity in my home. They threw me an offer to cut my bills down ect. I went into talk to them at a local office and they spelled every thing ourt My 1st loan is 140k on a adjustable plan. They were telling me to roll in my car loans, credit cards and student loan to cut monthy payments total as 70k. They valued my property at 220,000 did not send our a appraser, they also told me that it would help my credit score substantually doing this so i could refinance my 1st. Now my 1st adjusted from 5.7% to 9.22% with payments increase HUGE. I called Country Wide to dicuss refinancing. They looked it up and it did show my Credit Score did go up to 680. and yes we are ready to work with you. They sent a appraser our 300 dollars extra out of my pocket and they apprased the property at 185k, leaving me backwards 35k. they then told me they could not do anything.

to break it our
before this refinance Now after this
140k 1st 140k 1st
35k 2nd mortgage 80k in HELOC
20k in student loan Now told value
25k car loan is 185k
Property value was
told to be at
220,000

Answer 1

Wow I feel for you. As a bank and a broker there are a few "outs for you". You could find a broker that underwrites for many companies, one that will allow a AVM - a AVM is where you do not need the appriasal, where they go online and get the value - with compairable comps. That sounds like what the other company did. There are companies that do this. I underwrite for 150 companies, and have done AVM's - I do that if my client can not afford the appraisal.

You could get your own appraisal done, have a realitor come in and do a walk thru, and get their idea. I do not know who this last company used - was the person that came and did the appraisal a local person? One that knows the area?

The other thing is you could go with a 125 loan ( I do not like them, but have done them as per my clients request). In that case your loan amount would be 231,250 based on the lower appraised value. A 125 LTV loan is a 2 loan - so you would not be saving alot of money (if any). The first is a fixed and the 2nd is normally at a adjustable. You can get a fixed rate - so talk to a Mortgage Broker. One that is knowledgeable...(ok). But I would look at your mortage note, and your rider's that is attached to it, to see how much your rate will rise. I do agree that your rate jumped up too high.... If I can answer any more of your ?'s let me know. Good luck to you and Happy Thanksgiving to you and your family.

Answer 2

You might want to see if you can get a free consultation from an attorney.

Home values do change, but that's a pretty big drop for a year from 220 to 185. At the same time, interest adjusting from 5.7 to 9.22 is more than the maximum allowed under any note for any loan I've closed.

I smell an unethical practice here on the part of the 220 lender. I think they duped you into a loan too large to refinance any time soon with a low introductory rate and an adjustment to way above what the market would give you. I'll bet you weren't represented by an attorney, and they probably didn't inform you of that right.

I'd want to examine the whole transaction, the Note, the Mortgage, all the ancillary documentation. There may or may not be anything that can be done, but it's worth talking to some knowledgeable lawyers about.

Answer 3

I am seeing much more of this these days and it is due to the pullback in values. Many borrowers refinanced to 100% last round and took the short term loan solution...an adjustable mortgage. It can seem like the perfect solution because the payment is so low but when that adjustment period hits it is a real eye popper.

Countrywide is not at fault, it is your loan broker in actuality. If for no other reason than simple disclosure of the risk associated with an adjustable....especially at 100% finance.

Here is some additional info. Hope this helps.

Answer 4

This is mortgage and financial question. I would get a second opinion. This is big money we are messing with and your life. And the most important part of being a professional is making sure your client understands. It could be a great deal, but because you don't understand, you want to back out and not just go for it.