Mortgage Rates.......

[Donuthole]

So is there anything out there to help a refinance for someone who has Lender-paid Mortgage Insurance? We opted for this lump sum PMI three years ago when we purchased our house and it has turned out to be a terrible investment. Financially it was a wise decision, as our "break-even" point was 26 months. However, nobody will refinance our loan with LPMI and nobody will give us a reason why.

Some google searching reveals a theory that the refi software being used by banks does not accommodate LPMI, so the banks have instructed their refinance agents to reject any refis with LPMI, because the work would have to be done by hand.

Can any of CUF's people in the mortgage/refinance/lending industry shed any light on this?

[cougjunkie]

So is there anything out there to help a refinance for someone who has Lender-paid Mortgage Insurance? We opted for this lump sum PMI three years ago when we purchased our house and it has turned out to be a terrible investment. Financially it was a wise decision, as our "break-even" point was 26 months. However, nobody will refinance our loan with LPMI and nobody will give us a reason why.

Some google searching reveals a theory that the refi software being used by banks does not accommodate LPMI, so the banks have instructed their refinance agents to reject any refis with LPMI, because the work would have to be done by hand.

Can any of CUF's people in the mortgage/refinance/lending industry shed any light on this?

What happens is even though you are not currently paying MI monthly on your loan, they still have mortgage insurance attached to your loan and your note. Most loans with mortgage insurance disqualify for any of the new government programs like DU refi plus and Freddie Open Access. These are the Fannie Mae and Freddie Mac programs that will allow you to go over 100% of the value on your house.

How is the loan to value on your home? Is it like the rest of Las Vegas?

[Donuthole]

What happens is even though you are not currently paying MI monthly on your loan, they still have mortgage insurance attached to your loan and your note. Most loans with mortgage insurance disqualify for any of the new government programs like DU refi plus and Freddie Open Access. These are the Fannie Mae and Freddie Mac programs that will allow you to go over 100% of the value on your house.

How is the loan to value on your home? Is it like the rest of Las Vegas?

Our home is upside down just like the rest of Vegas, yes. As to the Mortgage Insurance issue, for some reason the LPMI is an issue, where regular PMI is not--we have numerous friends who have done a streamline refinance of their conventional loans despite being upside down and having borrower-paid PMI.

We've been trying to refinance for the better part of two years now, while hearing constant promises that there will be a new "program" or "plan" for our situation soon. At this point, i think we may just stop paying our mortgage to force our lender to come to the table. I'm not being ridiculous and seeking a principal reduction or even a forbearance. I just want my interest rate to go down.

[cougjunkie]

Our home is upside down just like the rest of Vegas, yes. As to the Mortgage Insurance issue, for some reason the LPMI is an issue, where regular PMI is not--we have numerous friends who have done a streamline refinance of their conventional loans despite being upside down and having borrower-paid PMI.

We've been trying to refinance for the better part of two years now, while hearing constant promises that there will be a new "program" or "plan" for our situation soon. At this point, i think we may just stop paying our mortgage to force our lender to come to the table. I'm not being ridiculous and seeking a principal reduction or even a forbearance. I just want my interest rate to go down.

With regular PMI you can go back to the original PMI provider whether it be (Genworth, MGCI, PMI, etc.) and re-up so to speak. With LPMI your loan still technically has MI on it but there is nobody to re-up with. That is why lenders won't touch it. LPMI is still a great option and hopefully something is rolled out eventually to help those with LPMI but as of right now there is not much available. The only possibility for you is to call your lender and ask them about the Making Home Affordable program. You may qualify for that, its one of Obamas new things.

[Donuthole]

With regular PMI you can go back to the original PMI provider whether it be (Genworth, MGCI, PMI, etc.) and re-up so to speak. With LPMI your loan still technically has MI on it but there is nobody to re-up with. That is why lenders won't touch it. LPMI is still a great option and hopefully something is rolled out eventually to help those with LPMI but as of right now there is not much available. The only possibility for you is to call your lender and ask them about the Making Home Affordable program. You may qualify for that, its one of Obamas new things.

Yeah, MHA is out for a number of reasons--we earn too much, our loan isn't Fannie mae or Freddie Mac, and we're just outside the 125% upside-down threshold. Our lender (BOA) has pretty much told us "sorry, you're stuck".

[cougjunkie]

Yeah, MHA is out for a number of reasons--we earn too much, our loan isn't Fannie mae or Freddie Mac, and we're just outside the 125% upside-down threshold. Our lender (BOA) has pretty much told us "sorry, you're stuck".

That is one of the problems with BofA they portfolio a lot of stuff and don't always sell to fannie or freddie.

Hopefully your rate is not terrible right now.

[Donuthole]

That is one of the problems with BofA they portfolio a lot of stuff and don't always sell to fannie or freddie.

Hopefully your rate is not terrible right now.

Not terrible by historical standards, certainly, but pretty bad relative to current rates. I've done the math and a 30-year fixed refi at current rates would save us $400-500 a month. In fact, a refi at today's 15-year rates would actually be about $100/month cheaper than our current 30-year fixed rate.

[Color Me Badd Fan]

Not terrible by historical standards, certainly, but pretty bad relative to current rates. I've done the math and a 30-year fixed refi at current rates would save us $400-500 a month. In fact, a refi at today's 15-year rates would actually be about $100/month cheaper than our current 30-year fixed rate.

Wow.

I refinanced down to 4.25, last year. I have an FHA loan, so it wasn't much of a problem getting that done. The mortgage insurance kind of blows, but I built/bought my house in the Summer-Fall of 2008, so FHA was pretty much all I could do unless I could have come up with 20%.

[Donuthole]

Wow.

I refinanced down to 4.25, last year. I have an FHA loan, so it wasn't much of a problem getting that done. The mortgage insurance kind of blows, but I built/bought my house in the Summer-Fall of 2008, so FHA was pretty much all I could do unless I could have come up with 20%.

Yep. We're flushing money down the toilet every month and can't change it, all because we did something financially prudent in pre-paying our PMI.

This is turning into a pity party, and that's not my intent. But millions of people are refinancing their upside-down properties and i'm being told I can't because of some ticky-tack technicality.

[Babs]

Yep. We're flushing money down the toilet every month and can't change it, all because we did something financially prudent in pre-paying our PMI.

This is turning into a pity party, and that's not my intent. But millions of people are refinancing their upside-down properties and i'm being told I can't because of some ticky-tack technicality.

Wow. Something about this screams straw man.

[Donuthole]

Wow. Something about this screams straw man.

Tell me about it.

[Clark Addison]

Yeah, MHA is out for a number of reasons--we earn too much, our loan isn't Fannie mae or Freddie Mac, and we're just outside the 125% upside-down threshold. Our lender (BOA) has pretty much told us "sorry, you're stuck".

Sorry about that.

[cougjunkie]

Anyone that has not jumped on board yet, hold tight for a week or so and you may be rewarded for procrastinating.

MBS prices are up 1 and 9/32 (FNMA 30-yr 3.5 at 102.30), far above 9:45 et pricing of -1/32, and at the high for the day. The big news was the Fed announcement (see below), which lifted MBS markets and caused stocks to move lower. August Existing Home Sales rose 8% to an annual rate of 5.03 million units, above the consensus forecast of 4.70 million. The inventory of unsold existing homes declined to an 8.5-month supply. The Dow was down 280 points. Tomorrow, Jobless Claims and Leading Indicators will be released.



The Fed announced that it will extend the average maturity of its portfolio by purchasing $400 billion of longer-term Treasury securities and selling an equal amount of shorter-term Treasuries (known as Operation Twist). The Fed's goal is to help push longer-term rates lower. In addition, the Fed will reinvest MBS principal payments (from prepayments and maturing securities) in additional agency MBS. Until now, the Fed has been reinvesting the MBS principal payments in Treasury securities. Both of these measures contributed to the improvement in MBS prices this afternoon.

[CJF]

Will they do anything about mortgage insurance for FHA loans?

[cougjunkie]

Will they do anything about mortgage insurance for FHA loans?

Besides keep raising it? I doubt it.