Mortgage debt (Photo credit: Wikipedia)
HARP2.0 has been a Godsend to some. Refinancing at a lower rate that you never thought you could get is a welcomed surprise.
But, if you have a 2nd mortgage (Aka: home equity loan or HELOC) you cannot roll it into your first mortgage and get a HARP loan. You must either pay it off or have the current lender agree to stay the second position lender.
Your 2nd mortgage company may or may not want to do this, understand the HARP program or even be set up to accomplish this goal.
First, let them know that there is a bigger chance of them getting paid because you will be lowering your monthly payment.
Second, they will be in the same position they are now so what’s the big deal? Also, this program will stop values from falling and will improve their position overall.
Third, the HARP program allows for the CLTV (combined loan to value) to be unlimited.
But, you will face the dreaded customer service person that does not understand, has not been trained or is being told to tell you NYET. Don’t give up, get supervisors on the phone, visit the bank and don’t leave until they do it, twitter that they won’t do your loan, contact journalists and tell them your situation, social network with others to see how they did it, talk with your mortgage broker to try to help you and in the end, don’t give up!
HARP2 by Fred Glick 
Great in concept! However you know the 2nd lien holder will not budge.
I am in that boat currently. Been going through a HARP refinance for over a month now and just yesterday found out that PNC is denying our subordination request because the CLTV “exceeds subordination requirements”.
I phoned PNC this morning, and here are the highlights of my incredibly frustrating conversation:
I just spoke with PNC and here are the highlights of the conversation:
1) It’s a 3rd party loan and the actual bank holding the loan is who actually denied the subordination;
2) They (PNC) can’t tell me who the 3rd party is so I have zero recourse to try and state my case;
3) They told me that there are zero exceptions and that the current CLTV cannot be higher than it was originally (80%). With the HARP refi, evidently it’s at 119%;
4) They did not do a real appraisal (so really they have no idea of the true value of the property);
5) I was told, in no uncertain terms, that the 3rd party would not reverse the decision or allow any type of appeal process (sure would be nice to be able to actually ask them);
I haven’t yet heard from my loan processor handling the refi. But, I have a feeling now that everything’s over. This refi would have saved us $600 a month, so PNC would have been better off in the long run because our plan was to hammer away at their loan with that extra money.
Any suggestions/comments? I’m so frustrated. I’m actually considering legal action. I’m sure it probably wouldn’t get me anywhere but it might be satisfying. lol (Probably not …)
~H
The issue is that PNC can do what it wants. They are under no obligation to subordinate. They are one of the toughest companies to subordinate with.
The people that wrote the HARP 2 program did try to put pressure on the second lien holders to cooperate.
The PNC people will be in a better position with your new loan and they are in a worse postion by staying where they are.
I would start by going to a branch and seeing if a branch manger has any influence. If not, go to Congressman’s office and talk to their real estate liaison.
Call me for for more details at 215-852-4469.
Good luck,
Fred
Thanks! We actually bank with PNC, as well. We didn’t choose them (not as a bank, nor as the handler of our HELOC). Our small town bank was bought out by PNC several years ago, and then they also purchased our HELOC a short time after that. They must like us (yea, right).
Would visiting my local branch help, you think? Are the “PNC Bank” that handles mortgages and the “PNC Bank” that handles my checking account all that closely related? I guess I always assumed they were fairly vastly different entities.
Additionally, what do you make of them saying that the 3rd party made the decision and wouldn’t ever budge. That makes it seem to me that it doesn’t make any difference how much pressure I put on PNC. Or, maybe they’re just saying that to make me go away?
~H
They have customer service people that are robotic and are told what to tell you. Yes, it’s the same PNC. Go get em!
So, I’ve got a crazy question. As much as I hate the prospect of giving PNC *more* of our business … I bet they would “subordinate” the loan if we did the HARP refinance through them. Thoughts on that? I contacted Congressman Wolf’s office; I’m eager to speak with them.
I doubt it, but it would set them up for a class action discrimination lawsuit! I do have an attorney that does them. Let me know!
Not sure I follow. What would set them up for a class action lawsuit? I’m already considering filing suit. My biggest issue is that this 3rd party lender is evidently who made the final decision, yet we’re not “allowed” to know who the 3rd party lender is.
If you documented that they would not do it because they did not do the first but did it since they are the first and second, you got them!
Ahh, I see. But I figure it would be “legal” since they wouldn’t technically have to “subordinate” to themselves would they? Or would they? I don’t know. I’m probably in over my head, but I’m not going down quietly! I really do appreciate your time!
THey WOULD have to subordinate. Subordination means that they would remain the 2nd mortgage!