13 Dec
Posted in: My Ongoing Story, Process
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3 Bank of America Refinance Attempts, 3 Dramtically Different Outcomes

Three times in the last month, I’ve applied for HARP 2 through my current lender, Bank of America, and received 3 outcomes.

Today I heard that HARP 2 was not available through Bank of America until December 1st, 2011. So, I called back to see if, now that HARP 2 was available, if I would get a more appropriate outcome.

On my third attempt, Bank of America told me that as of December 13 (today’s date), they have not released the HARP 2 program, and that they “do not have a date as to when it was going to show up.”

In all 3 refinance attempts I specified that I wanted to refinance through the new HARP 2 program, and none of the 8 or more people I spoke with mentioned that HARP 2 had not been released. According to the most recent representative I spoke with, each attempt to refinance through Bank of America would have been through the original HARP program. But each attempt yielded dramatically different results.

3 Different Outcomes Breakdown

Here’s the breakdown of the 3 attempts, starting with my current scenario, for reference, all using 30 year fixed as a consistent baseline.

Current 1st Mortgage / 6%

$ 988     Principal
$ 300     Escrow
$1288    Total monthly payment

1st Attempt — Not Approved

Early November, 2011

I was not approved to refinance through the HARP program at Bank of America, my current loan holder.

2nd Attempt — 5.375%

November 21, 2011

1. I qualify for the loan at 5.375, 30 year fixed, but the percentage is not that great, they say, because of my 2nd mortgage.

2. While the appraisal fee of $425 not required, there are still over $3000 in closing costs.

3. It will take approximately 2 years to recoup the refinance costs.

$ 382    1/4 of a discount point
$1175    Bank of America’s total fee
$1567    3rd party fees

$3124    Total closing costs
$  460   Out of pocket cost

$ 856    Principal
$ 264    Escrow
$1120    Total monthly payment

$ 168    Total monthly savings

3rd Attempt — 4.5%

December 13, 2011

1. I qualify for the loan at 4.5%, 30 year fixed.

2. Closing costs are $691 less than the second attempt.

3. It will take 4.6 months to recoup the refinance costs.

Discount points are not mentioned in the conversation.

$191       Discount Points
$866     All lender fees (Bank of America’s total fee)
$1567    3rd party fees

$2433    Total closing costs
$      0    Out of pocket cost

$ 775    Principal
$ 264    Escrow
$1040   Total monthly payment

$ 248    Total monthly savings

Loan Amount Breakdown

$148,484  Current total loan amount
$1,380       Current escrow balance

$153,000  New total loan amount
$1887        New escrow balance

$188          Interest

$4516        Total loan increase

In Conclusion

The third attempt looks like what I should have been offered all along. I’m happy to finally have received a more appropriate interest rate, but am more confused than ever about actually Making Sense of HARP.

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