Am I just NOT GETTING IT???? This client DESERVES a refinance! Subordinating lender says "NO"! Say what???

By
Mortgage and Lending with Seacoast Mortgage Corporation, RI (20021119LB & 20031576LL), MA (MC2107) & CT MLO 10920

Am I just not getting it? Where is the COMMON SENSE?

Client owes $140k on their first mortgage; $130k on their 2nd and $17k on their 3rd.

They have been APPROVED for an 85% LTV (loan to value) and a 90% CLTV (combined loan to value) with FHA. We are consolidating their 1st and 2nd into one loan and subordinating the 3rd loan, which will be the new 2nd. Saving the borrowers $1000/month!

We are NOT adding to the 1st mortgage: it is simply $140k+$130k=$270k. The 2nd lien position (formerly the 3rd lien) will be $17k. So, there is NO cash out.

Guess what? The 3rd lien holder is unwilling to subordinate! They are now going into 2nd position, but they refuse to agree to this refinance. Why? According to their rules: they can not allow a subordination over 80%. They will be at 90%. Well, HELLO!!!!! They are already at 90% without us doing anything. Plus, they are in 3rd position, which is WORSE than 2nd position.

Am I MISSING something? Is it me?

This is going to save the borrower $1000/month! Which they have every plan of using this money towards getting rid of their credit card debt and then the $17K 2nd lien.

Without this refinance, they are struggling to make payments. They have not missed a payment, but this is how people lose their homes! The banking industry is not using COMMON SENSE!

I have intentionally omitted the lender’s name refusing to subordinate their 3rd position into a 2nd position, but it is a lender which has received a lot of the taxpayer TARP money! As a loan officer, owner of a mortgage company, financial adviser and a taxpayer, I AM NOT HAPPY!

These clients deserve a refinance!

AM I MISSING SOMETHING?????!!!!!
Posted by

Ann Sabbagh, President

"The BEST compliment is a client referral: Thank YOUUU!"

Seacoast Mortgage Corporation

401-305-6906 or 508-243-1190

Residential & Commercial Financing

MLO10920

RIAR: teacher for "The Mortgage Course"; "Valuation of Commercial/Investment Real Estate"; "Reading Financial Statements"

 

"When you choose me as your mortgage consultant, you also choose a financial planner who cares about YOUR financial strength."

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Rainmaker
1,793,977
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

Ann, this is another case in point where the lenders are stuck in their protocols that make no sense...battle them ..if anyone can you can.  I've attended your classes at RIAR & you are great...thanks so much for the note...I hope you are able to help these clients.

Sep 23, 2010 01:51 AM #1
Rainmaker
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Dan Rosenberger
Harvest Realty - Westfield, IN

Ann, that is asking alot trying to get a bank to use logic.  If they knew what logic was, the crisis of the last two years maybe wouln't exist or at least it would be more mild.   Even though you have not mentioned the name of the bank, I bet you will remember this.

Sep 23, 2010 02:59 PM #2
Rainmaker
1,027,000
Susan Haughton
Long and Foster REALTORS (703) 470-4545 - Alexandria, VA
Susan & Mindy Team...Honesty. Integrity. Results.

The banks must have logic stockpiled somewhere 'cuz they are certainly not using much of it.  Sadly, this type of story is all too common.

Sep 23, 2010 04:20 PM #3
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Rainmaker
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Ann Sabbagh

President, Sr. Loan Officer
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