I am working with my current servicing company (PHH) to do a FHA Streamline refi and wondering if anyone else has experience with them and how long it took. Back on July 1 they said it would be 45 days and an easy process. Today is day 112 and still no closing. We had a closing set up for Monday but the notary never showed and when we called her she said they had cancelled it. Right after that my emails to our loan rep got a response of "this has been turned over to my manager and he will contact you".
I spoke to the guy yesterday and while apologetic, he said that the final QA on the file had turned up that they wouldn't be able to easily re-sell the loan. No specifics as to what that means exactly but he's supposed to send over more info today. He then said that they would offer me a 25 year term and he is going to send over details.
Certainly lots of questions here but here are some of my top picks:
- How long does this process normally take? I wasn't that concerned about it taking a long time since it is a house we already own but once the closing was set up and cancelled everything feels long now. Chalk it up to mental accounting, I guess.
- Can they legally use an excuse about not being saleable and cancel? None of the data has changed about this house (aside from 3 additional months of reduced principal) so not sure why this would come up just a couple days before closing.
- Is a 25 year term a real FHA streamline loan? Seems like a bait and switch to me.
- Can I just re-start the FHA streamline loan with another company? Seems like yes on this one but I am not that familiar with FHA since this was the only FHA loan I have done and it was in 2003.
The main appeal of this was no appraisal (we overpaid in 2003 and not sure it will appraise high enough right now, first house rookie mistake) and that we would save us over $500/mo on the payment.
For options going forward if the streamline does totally fall apart, I think my best bet is to pay down the principal to an appraisable level and refi to a convention loan. Not sure I want to re-start this process elsewhere and have it fall apart 4 months later again.
Thanks in advance for any thoughts and suggestions.
Withdraw the loan with PHH and get to a new lender. FHA streamlines are one of the easiest loan to do for a lender. Something is not right here.
Whoa. Pull the plug. I close FHA streamlines in less than 30 days. As do most lenders. You should have no money invested into this since there is no appraisal.
If I had to guess, they are probably stalling now because they took too long initially, and blew your rate lock, and are now losing money on the deal, and they are ashamed to tell you that. So they are stalling, hoping the market improves so they can re-lock you. Just a hunch...
Thanks guys, good feedback. I spoke with PHH guy again today and he is saying that since the loan originated in 2003 we can't do a 30 yr fixed as the FHA only allows up to 12 years extension on the original term. Supposedly they will just adjust the term to 25 years and redo the numbers so we can close next week. If not, then I am going elsewhere. Already spoke with @Upen Patel so I know I have options with him.
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