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Because so many homeowners are taking advantage of the government –sponsored Home Affordable Refinance Program known as HARP there is a problem for many large financial institutions as regards keeping up with the applications backlog. In order to move things along more quickly some borrowers are using brokerages as well as community banks that are not servicing HARP loans.
Michael Fratantoni who is vice president for research and economics for the Mortgage Bankers Association said that they had heard of waiting periods of 60 to 90 days for those asking for loans at larger banks running at full capacity.
The weekly survey by the Mortgage Bankers Association released on Wednesday reported that almost 80 percent of the applications were for refinancing. About a quarter of transactions were HARP -related according to previous surveys. The purpose of HARP was to make refinancing easier for those who had mortgages either owned or guaranteed by Fannie Mae and Freddie Mac and who were looking for better loan terms. This program has since been expanded as HARP 2.0. Mr.Fratantoni explained that many who wish to refinance do so with the bank that they used for their first loan because they feel that things will go more smoothly and the bank has all the information to carry out the transaction. However the application process is more difficult now that the lending standards are tighter because of the mortgage crisis.
A real estate lawyer in Astoria , Queens, Andrew Latos, has represented homeowners in transactions with big banks and he says that he now charges more for closings due to the fact that they take much longer to do. He explained that what were two –hour closures are now more in the region of five or six-hour closures.
Those who would like to speed up the refinancing process are increasingly taking their business to mortgage brokers who claim to have direct contact with the banks and can keep better track of what is happening with their client`s file. Vanessa Thatcher, a senior officer with Atlantic Home Capital in Ronkonkoma N.Y. says that a file has to pass through many hands in a large financial institution .She charges the clients 1 to 2 percent of the amount of the loan.
Sometimes a broker can be a financial consultant at the same time .It often happens that Mark Yecies, who is the president of SunQuest Funding in Cranford N.J tells his clients not refinance as he did recently in the case of a borrower who had been told that he was suitable for a refinance. After checking the numbers Mr.Yecies saw that most of his client`s payment was principal so a refinance didn`t make sense.
Community banks don`t process HARP loans and normally can do a refinance within 30 days are finding that it now takes longer due to the increased volume of loans.
The big banks have had to increase staff to deal with the workload but can`t seem to refinance in less than 90 days.
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