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Anybody done HARP?


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Just curious as to what is involved, what kind of money you need to do it and so forth. I have had some early discussions with Quicken Loans and they tell me that I am eligible for the program, but they were evasive when I asked about front money - which makes me suspicious. I would like to refinance and save money, but if I need a lot of cash up front it is a moot point.

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I did Harp a while back. There was really no downside to it. I wasn't asked for any upfront money. I was disappointed I couldn't fold a higher interest rate second into it, which in my case would have helped me a lot more. The other downside for me was when I did it interest rates were just above 5%. So I couldn't do it again when they fell down to the 4% range. (They only allow one HARP refi, period. It did save me some money overall though. On a personal note, I finally got the LTV I needed so I was able to recently refi into a good rate and get rid of the second.

I went through American Capital in Aliso Viejo and was treated very well, not like a number and I have no problem recommending them. If Quicken makes you nervous, email my friend Sean at sean@acchomeloan.com

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No up front fees means your paying for it in your rate.

 

LO's make their money either up front, in standard fees, or almost all of them do some pull the wool over sales pitch about no fees and when they shop your rate say par is at something like 4 3/4% but they will bring it back to you at 5 1/4% so they make that half a point. At the same time, banks offer incentives to get a loan through them. So, when a LO/broker looks at a lender sheet they can see what par is and depending on the rate they pick for you will get "back points" or a kick back for selecting a certain rate.

 

So not only did they get you on the rate difference, but also by picking that higher rate with that certain bank they get a kick back usually in the neighborhood of .25% and I've seen it even up to 1.25/.175%.....back in the 90's it was even more nuts. So that half point plus around a point and a quarter and they are making just under 2% on your loan amount.

 

I mildly worked with Quicken, they were always on my lender list, but it wasn't until I jumped ship that they became real big players (they always were, but they kind of lead the pick up from the blowup).

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Lending practices were sketchy in the 90s. I worked foreclosures for Advanta which was a service provider for the lenders. 50% of the defaults that came across my desk were first payment defaults.

And the 2000s.....

People always want to point the finger, but someone thought it would be ok to let people that are janitors simply say they make 80k a year and approve that loan.

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I mildly worked with Quicken, they were always on my lender list, but it wasn't until I jumped ship that they became real big players (they always were, but they kind of lead the pick up from the blowup).

 

I did a refi in 2006 when rates dropped. I originally worked with Quicken. My first indication that there might be an issue was that they wanted $500 up front just to work with me. Nobody from the company would return my calls - until I bailed on them for a local lender (credit union). They called within five minutes after getting that news, after me trying for two solid weeks to get someone to tell me when we were closing (six weeks into what was supposed to be a 30-day process and they still had no answers).

 

I appreciate the information that everyone has provided.

 

BTW - looked at that site some time ago, GB, and found a lot of it clear as mud. That is why I asked people who might have been through the process already.

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Yeah, back then it was a thing where banks were lending to anyone, so I can't say you were put on the backburner for a prime deal. But refi's are always put on the backburner as purchases take precedence because purchases actually have a timetable to close or the deals fall apart....which that was a big purchase period when they were handing out money.

 

If banks get purchases they always go first, they have to.

 

There are stipulations and variables, but simply giving them $500 could have been a RESPA violation.....they are too big so I doubt it, but you can't simply collect money upfront to work with people.

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The Neg-Am loans were the end of the former mortgage industry. I did a 900K loan with no points upfront, but 3 points on the back for selling the higher rate. The borrower didn't care about the rate, only the fact that the payment was so ridiculously low for the first 5 years. I was actually one of the people that would go out of their way to explain the drawbacks of those types of loans. Most LOs only cared about making as much money as possible. At that company, from about 2004 - 2007 (before the bubble burst wide open) there were some guys making like 50K per month. I wasn't one of them, but I averaged about 10K. Some of the dumbest guys I've ever met were driving around in brand new 60K Mercedes'. In retrospect, maybe I was one of the dumb ones not to take advantage of borrower's gullibility. 

Edited by Ray McKigney
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Eh, looking at their files doing compliance, all they did was offer rates worse than par and then call them 6 months later with the rate closer to par. They just cycled the same borrowers. It sounds bad when you think about it, but these borrowers were saving money every time, and grateful.

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