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We are considering refinancing our 30 year first mortgage (no

second) to 15 years using...
We are considering refinancing our 30 year first mortgage (no second) to 15 years using the Home Affordable Refinance Program (HARP). We are comparing rates and costs with mortgage companies to ensure the best refinance terms. Initially, we had been informed that our loan, held by BofA, is a Fannie and we qualify for HARP. As we prepared to lock-in rate and term, BofA informed us that our loan is a HELOC and does not qualify for HARP in Texas. Is this correct?
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Answered in 23 minutes by:
6/9/2011
Maverick
Maverick, Lawyer
Category: Real Estate Law
Satisfied Customers: 6,426
Experience: 20 years professional experience
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Welcome to Just Answer! My name isXXXXX very much enjoy what I do and I hope that you will benefit from this information.

 

If you have a HELOC, then there is a good chance that it is not owned by Freddie/Fannie because they never really backed many of those types of loans.

 

However, you may want to check to see if either Fannie Mae or Freddie Mac owns your mortgage is an online property lookup tool:

 

Fannie Mae's lookup tool:

http://loanlookup.fanniemae.com/loanlookup/

Freddie Mac's lookup tool:

https://ww3.freddiemac.com/corporate/

 

If your property does not show up here, you should still call Fannie Mae or Freddie Mac to see they own your mortgage. Fannie Mae and Freddie Mac do not always have the exact address saved correctly. This is why it's important to call.

 

Fannie Mae's phone number:

1-800-732-6643 or 1-800-7-FANNIE

Freddie Mac's phone number:

1-800-373-3343 or 1-800-Freddie

 

If your loan is not Freddie / Fannie than HARP will not work.

 

 

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Customer reply replied 6 years ago
Thank you for the information. I have called Fannie Mae and confirmed that they do own my loan and they do not service HELOC loans. I have requested BofA contact their Fannie Mae representative and confirm. Since I have owned this home for 35 years, my loan has been bought and sold a few times and I have financed for home improvement (second mortgage for swimming pool). I have combined and refinanced for better rates a couple of times. Closing costs have been rolled back into the new loan. Would this activity be considered HELOC, and in Texas "once a HELOC, always a HELOC" apply? Does Fannie Mae owning my loan trump the Texas legislation?

Under TX law, a HELOC is defined as an "open-end account that may be debited from time to time, for which credit may be extended from time to time and which is subject to certain fees."

 

This is not the same as a traditional home equity loan because the HELOC draws out the equity in the home to be used at the owner's discretion as a line of credit.

 

So, the first thing I need to know is do you in fact have a HELOC? It would appear to me that your loan is not a HELOC if FM is servicing it.

 

 

 

 

 

 

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Customer reply replied 6 years ago

No, I do not have a line of credit, in fact, as a taxpayer, I have provided BofA a line of credit! I assume my previous home improvement loan is a traditional home equity loan.

Would this disqualify me from HARP?

No, because HARP allows traditional home equity loans. Sounds like someone at BoA is confusing a HELOC with a traditional home equity loan.

 

 

Maverick
Maverick, Lawyer
Category: Real Estate Law
Satisfied Customers: 6,426
Experience: 20 years professional experience
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Customer reply replied 6 years ago

Maverick,

BofA responded as follows: "Whether your loan was a HELOC, HELOAN or cash-out refinance it is a TX A6 and will not qualify for the Making Home Affordable program." This appears to be correct, however, how did BofA get Fannie Mae and what does a TX A6 have to do with HARP?

The Making Home Affordable Program includes the Fannie Mae Home Affordable Refinance Program (HARP) and the Home Affordable Modification Program (HAMP).

 

http://www.mortgagefit.com/texas/a6loan-law-3.html

 

To be honest I am not able to make the connection but it appears to do with the fact that Texas has a liberal homestead policy and thus requires and 80% loan to value parameter. This may be why they are not able to do the HARP for you. See if the above link helps.

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