Financing in Roseville>Question Details

Geegee, Home Buyer in Roseville, MI

I HAVE A 80/20 LOAN I WANT TO REFI. MY BANK NOT HELPING ME AT ALL. THE 20% ADJUST DEC OF THIS YEAR. THE 80% IS OWNED BY FREDDIE MAC. WHAT CAN I DO?

Asked by Geegee, Roseville, MI Mon Jan 25, 2010

I KNOW MY VALUE WENT DOWN. I AM CURRENT ON MY PAYMENTS BUT I NEED HELP. IS IT POSSIBLE TO GET THE 2 MORTGAGES COMBINED IN A 30 YEAR FIX

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Let's please be light on your recommendations until we know all the options.

First, HARP loans allow above 100% financing. You cannot combine the two but you can refinance just the first mortgage. In fact, lenders are faster and easier in subordinating 2nd mortgages these days when they know the 1st is going to be a HARP refinance.

James' suggestion regarding a FHA loan is a good one. Especially since you can have above 100% of the property value between the two loans and still do a FHA loan. The FHA loan can only go up to 97.15-97.75% of the value but the 2nd mortgage can go above this amount.

I'll need figures of your value to determine which options best suit you.

This blog post I wrote will help answer some of your questions:

http://www.keaneloans.com/2009/12/18/homeowners-guide-to-harp/
1 vote Thank Flag Link Mon Jan 25, 2010
I had a short sale last year and my Realtor recommend http://www.cfs-mortgage.com/flex for a home loan. I am very happy to be able to purchase again.
CFS Mortgage assists homeowners who have recently been through a foreclosure, short sale or have recently emerged from bankruptcy.
0 votes Thank Flag Link Sun May 19, 2013
Hi Geegee

It sounds like your main concern is the 20% loan, because that is set to adjust, am I right? Do you know where it is set to adjust to?? A lot of 2nd mortgages are tied to prime rate or the treasury rate, and those two indexes are pretty low right now so a lot of them actually adjust DOWN. Check your note to find out the terms of your 2nd mortgage.

As far as rolling them together, I'm afraid that won't be possible if the value has gone down. You may however be able to refinance the first mortgage using either a HARP refinance (through your present lender) or FHA loan (any FHA approved lender should be able to help).

Either of these loans will require an appraisal though and will also require the owner of the 2nd mortgage to allow you to "subordinate" their 2nd loan, which means they agree to stay 2nd in line in terms of liens. It's not a guarantee they will agree, especially if you're adding to your principal balance on the new first (rolling in closing costs for example), however like Keane said in a lot of cases nowadays they are agreeing to do it.

A lot of people are in your same situation, especially here in Michigan Geegee. Best of luck
0 votes Thank Flag Link Tue Jan 26, 2010
Derek makes a great point. Most likely your home will not appraise, but it might not hurt to try. I would contact another lender. If you can afford it, I would get an unbiased appraisal then you know where you stand.

As unfortunate as it is, the banks are inundated with these right now and in my experience my clients are not getting their attention until they are at least 2-3 months in arrears. A short sale might be an option, but I would contact another lender first. There are many variables that could come into play that you have not shared, so it is difficult to give an accurate detailed answer.
0 votes Thank Flag Link Mon Jan 25, 2010
Geegee you have 2 loans not one. You may be able to refinace both into one FHA loan but you need to talk to a lender to do that. Walk into any bank and they can help you do an FHA refi. If the value of your property has dropped below the payoff value of you 2 loans you may run into some difficulty.
0 votes Thank Flag Link Mon Jan 25, 2010
Geegee,

Refinancing will likely not be an option, as you need enough value there to substantiate an appraisal at value.

If you have a financial hardship, a short sale may be an option. Initially, you may want to call your lender on the 20% and see if they will work with you in any way.

If you want to explore a short sale in more detail, please keep my contact info handy.

Thank you

Derek Bauer
Real Estate One
Web Reference: http://DoortoDreams.com
0 votes Thank Flag Link Mon Jan 25, 2010
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