Excuse me BofA! You CAN NOT have it both ways!

Excuse me BofA! You CAN NOT have it both ways!

 I refinanced a loan this week for some past clients.  I did their purchase loan in 2005.  We did an 80-15-5 because they had another home that had not closed yet.  The 15% second was a home equity line of credit.  Their previous home sold and they paid off the 15% second in March of 2006.  They never drew another dime on the equity line.

 

June 2008: 
They received a letter from Countrywide telling them their 0 balance equity line was frozen.  They were not allowed to take any draws on the line because the value had decreased.  No problem for them.  They weren't using the line anyway.

Like lots of other people, the equity in their home has evaporated but current rates are still better than what they had on their first so we put together a Freddie Relief refinance - a great deal for them.  We are able to drop their payment $200+ per month and because they didn't have PMI on the original loan, there is no PMI on the refinance even though their LTV is now 95%.

October 2009:
Bank of America (aka Countrywide) rears its ugly head!  There had never been a Deed of Release recorded for the "no longer usable" home equity line of credit.  The title company received a notice from BofA that there would be a $350 Early Termination Fee in order to do the Deed of Release.  Early Termination Fee?  On a line of credit they were no longer allowed to use? 

Really??  This Early Termination Fee showing on the HUD1 would prevent them from completing the Freddie Relief refinance.

My client took BofA the statement from March 1996 showing where they had paid it off.  She took them the letter from June 2008 saying they no longer had a home equity line of credit.  She took them the statement showing the $350 Early Termination Fee.  She asked them how in the world they could expect an Early Termination Fee when they were the ones who terminated the line.  BofA's response - "We didn't close the line.  We just won't let you use it." My client spent over an hour discussing this with the Wizards of BofA.  At one point they actually told her "if you do your refinance with us we may consider waiving the fee". 

Really??  My client told the Wizards of BofA "either this fee gets waived and you allow the title company to record a Deed of Release or I will go to the Attorney General and see what they think!  You CAN NOT have it both ways!  I didn't terminate the equity line - you did." 

Guess what?  She got it!  Refinance paperwork is all signed - we will record and fund on Monday.

BofA - what are you thinking?  How many other people are you pulling this stunt on?

 

Jane Penttinen, Sr. Loan Officer

Sunstreet Mortgage, LLC

520-547-4150

If you, your friends or family require the services of a mortgage professional, please don't hesitate to call me.  I am never too busy for any of your referrals.

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