Getting the PMI runaround?

May 8, 2009 8:36 AM

Is anyone else getting the runaround on refinancing via the Making Home Affordable Act because you have PMI? Details inside.

We're trying to refinance under the new Making Home Affordable act. Because we are still very new homeowners and have PMI, we're being told by our primary lender (GMAC) that "the logistics are still being worked out, and they're negotiating details with the PMI providers."

We called Fannie Mae, who owns the loan, and were told that "there is a software issue that is not allowing PMI loans to be entered into the system."

The dig is that we had first called Chase to refinance, and the agent there told us that he had put in several loans with PMI.

Of course, as all this is happening, the rates are going up. It is obviously in the best interest of the lenders to have a higher-rate refi, so this really feels like the runaround.

Is anyone else having issues like this? I'm ready to call my congressman and/or network news people.

posted by nevercalm to grab bag (5 comments total)

From what I understand loans with high LTV ratios are difficult to get through.
posted by itsamonkeytree at 9:10 AM on May 8

You can try asking for a rate freeze while this issue is worked out. It's something that people frequently pay for, but if you negotiate hard enough, maybe you can get it for free? Just thinking out loud.
posted by Citrus at 9:17 AM on May 8

That's not our issue. We're being told either that the logistics haven't been worked out with the PMI providers, or that loans with PMI can't be put in the system.

Meanwhile, a rep from Chase bank told us he had done "several" loans with PMI.
posted by nevercalm at 9:18 AM on May 8

I'm working on a refinance on a house I got a year ago, with PMI. No issues. But, I am not going through GMAC or Fannie Mae. We started by calling the local mortgage company and they took it from there.

Rates have been fairly flat for a while now and my mortgage broker does not expect any sudden increases - and actually dipped down a bit yesterday so hopefully you can get it sorted out quickly and lock in. You can lock in a rate for a certain amount of time even if not all the pieces are in place. Ask your broker if that applies to your situation.
posted by mikepop at 9:20 AM on May 8

I'm afraid this won't help you, but you asked. We are refinancing with Chase. They sounded ready to refinance us with PMI if we wanted, but then a house two doors down sold high enough that we had the LTV we needed. So we likely didn't get far enough in the process to be told there was a 'system' issue. But I can confirm that Chase has been willing, at least.
posted by troywestfield at 12:35 PM on May 8