Refinancing (co-op) - any suggestions?

[beaujolais]

I'm in the process of looking into refinancing my co-op and wanted to see if you knowledgeable people have any wisdom or suggestions.

Any banks you think have good rates, fees and service? (I have the mortgage with HSBC right now and I do not like them at all.)

Is it o.k. to get a 30 year mortgage and pay in a few extra payments a year (as was suggested to me) rather than the 15 yr. mortgage and be locked into a higher monthly rate? (TD Bank only offers 30 & 15 yr. mortgages is why I'm not mentioning the 20 or 25 yr. mortgages.)

Thanks so very much !
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Yes, I know this is not a very fun subject but this is what I'm dealing with and I don't know that much about refinancing, so thought I'd put it out there. Thanks again, kind & wonderful friends.

 

[ksinger]

Well, I did the 30 year back in the day, because I was single, and didn't want to be locked to that higher payment. At the time my income and the house price were well matched and any more might have strained me. And years later, when I was laid off for awhile, that strategy really helped me weather the bills.

That said, we have been paying down the house at a clip and really are on track to have it paid off in 15 to 16 years.

I'd go with the 30, unless the rate is just THAT much better. How I did it, I bought a half? quarter? (don't recall now) point to get the rate closer to the 15 year rate. That point was paid off in five years. Seemed like a good deal to me.

Just be sure whatever note you make is an old 30 year no penalty for early payoff type of note. Some notes, I hear, have it written in that you can pay principal in between payments, mine is not like that, but for each monthly payment I can add principal, and I do.

I don't know any good banks, so I have no suggestions there.

 

[beaujolais]

Thanks so, so, so very much, K !

"Just be sure whatever note you make is an old 30 year no penalty for early payoff type of note."

I didn't know about that ! Will check. Also, will check on if I can pay between principal between payments or with the regular payment. Also, great idea about buying a point. Thank you, thank you, thank you, thank you, thank you, thank you, . . .

I can't thank you enough ! I owe you. Good karma must be coming to you for your help & kindness in this !

 

[ksinger]

Thanks so, so, so very much, K !

"Just be sure whatever note you make is an old 30 year no penalty for early payoff type of note."

I didn't know about that ! Will check. Also, will check on if I can pay between principal between payments or with the regular payment. Also, great idea about buying a point. Thank you, thank you, thank you, thank you, thank you, thank you, . . .

I can't thank you enough ! I owe you. Good karma must be coming to you for your help & kindness in this !

LOL! You're welcome! Although I don't think I told you all that much. It's been a few years since I made my note, after all. I know things have changed out there a bunch. When I made my note, they still did things like go over your credit and overall financial status with a fine-toothed comb and then made sure that they didn't approve you for more than a person could reasonably be expected to pay given your financial situation. Right after that, the entire financial system started going berserk like a kid eating tons of sugar. Now, I guess (hope) they are going back to making notes where they do due diligence again, and aren't trying to foist some wacky ARM or balloon payment instrument on the prospective home-buyer.

The only advice I got (from my mother, who was pretty sharp and no-nonsense in money matters: she worked in banks her entire adult life) was don't ever make a note that has anything but simple interest, and never let them hit you in the fine print with penalties for early payoff. And take your time reading that small print and ask questions. I just think it's always better - unless you're a financial whiz or can afford to lose your shirt (and the vast majority of us are not and can't) - to only make simpler contracts. It's kinda hard to get screwed with a traditional loan - most of us can understand them fairly well.

However, not to get you scared here, but you say that HSBC has your note? Do you know if they OWN the note, or do they just service it? As a preliminary thing to do, it would be instructive to inquire who holds the lein(s) on the title. Most likely they will either not know, or stonewall you.

 

[movie zombie]

co-op: don't often hear about one of those other than in NYC!

 

[MissStepcut]

co-op: don't often hear about one of those other than in NYC!

There's a bunch here in Chicago, too, especially in Gold Coast and Lincoln Park.

 

[beaujolais]

"Although I don't think I told you all that much."

No, no, you did. I am terrible at these things so it's all really important. I so appreciate your taking the time and energy to help me.

"but you say that HSBC has your note? Do you know if they OWN the note, or do they just service it? As a preliminary thing to do, it would be instructive to inquire who holds the lein(s) on the title. Most likely they will either not know, or stonewall you."

I don't know but I'll find out. Another huge thank you. What a PITA bank they (HSBC) are. You can't get a live person at any of their numbers, so I looked that up on the Internet and there was tons out there written about how you can never get a live person at any of their customer service numbers. They are also closing lots of branches, lately, btw. The only way I got to talk to an HSBC mortgage person was to go into the local branch and they called an HSBC mortgage rep for me to speak to on the phone. The people in the local branch admitted that you can't get a live person at any of their phone numbers. So much for their customer service, eh?

I just sent the rep an e-mail regarding if HSBC truly owns the note or they just service.

Oh, I'm formerly from Calif, but now in NY. The co-op is on Long Island. There are a fair amount of co-ops here.

 

[ksinger]

"Although I don't think I told you all that much."

No, no, you did. I am terrible at these things so it's all really important. I so appreciate your taking the time and energy to help me.

"but you say that HSBC has your note? Do you know if they OWN the note, or do they just service it? As a preliminary thing to do, it would be instructive to inquire who holds the lein(s) on the title. Most likely they will either not know, or stonewall you."

I don't know but I'll find out. Another huge thank you. What a PITA bank they (HSBC) are. You can't get a live person at any of their numbers, so I looked that up on the Internet and there was tons out there written about how you can never get a live person at any of their customer service numbers. They are also closing lots of branches, lately, btw. The only way I got to talk to an HSBC mortgage person was to go into the local branch and they called an HSBC mortgage rep for me to speak to on the phone. The people in the local branch admitted that you can't get a live person at any of their phone numbers. So much for their customer service, eh?

I just sent the rep an e-mail regarding if HSBC truly owns the note or they just service.

Oh, I'm formerly from Calif, but now in NY. The co-op is on Long Island. There are a fair amount of co-ops here.

OK...here's the deal. Understanding why I thought you should ask who the actual mortgagee is on your note, well, there is too much for me to type, quite honestly. But I implore you - and anyone else here who is a homeowner or considering payoff (like me) or refinance (like you) to read this piece in its entirety. It's long. But read it. Read it twice. Understand it with all your might. Because this piece explains the still-looming problems stemming from the subprime/tranched mortgage fiasco. It should scare the living crap out of EVERYONE.

The kernal of all this is that the recording of the title transfers has been irreparably broken, and now no one really knows (including the legal system) who possesses the right to foreclose on a mortgage. No one knows who the mortgagee is, and so you don't know who might turn up one day claiming that right...yes?

After you've read it come back and we'll talk some more. My husband and I are still pondering this at present, and have informally spoken with 2 lawyer friends about this. When we're down to about 6-9 months from payoff, we'll be doing a few legal things - like filing a quiet title - to cover our butts, to the degree that we can anyway. We are paranoid planners, he and I.

I don't know exactly how all this might affect your situation, but I feel you need to approach this with as much info as possible. Consider this post an educational PSA.

http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=3399&context=wmlr

Below is a small selection of some of the stuff from this paper, plus some of MY comments (mine should be obvious)....just to get you started.

mortgagee - an owner of the real property right to foreclose upon the security interest.

For centuries, American mortgage lenders eagerly recorded their mortgages with county recorders because state land title laws created incentives for recording and disincentives for not recording. For example, if a mortgagee fails to record its mortgage properly and then someone subsequently buys or lends against thehome and records its interest, the subsequent purchaser or lender often can take priority over the first mortgagee. Similarly, if a mortgagee assigns a mortgage to an investor, that investor eagerly would record documentation reflecting the assignment to protect against the possibility that the original mortgagee would assign the same mortgage to a different investor

ME: Then came MERS - Mortgage Electronic Registration System. And it has effed us UP badly. My understanding is that it was created to relieve those doing the buying up and the tranching of mortgages into mortgage backed securites, of having to do the time-intensive and expensive - and PROPER AND LEGAL - transfer of title at the state level when said note was sold. So...

state land title are statutes are often unclear. The state statutes do not have provisions authorizing financial institutions to use the name of a shell company, nominee, or some other form of an agent instead of the original lender. The mortgage instrument, however, names the actual owner of the interest in the land. After all, the point of these statutes is to provide a transparent, reliable record of actual—as opposed to nominal—land ownership.
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.
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Conversely, if MERS is actually a mortgagee, then while MERS may have authority to record mortgages in its own name, both MERS and financial institutions investing in MERS-recorded mortgages run afoul of long-standing precedent on the inseparability of promissory notes and mortgages. Since the nineteenth century, a long and still-vital line of cases has held that mortgages and deeds of trust may not be separated from the promissory notes that create the underlying obligation triggering foreclosure rights.

These cases do not merely hold that mortgages follow notes as a matter of default law, but that mortgages legally cannot be separated from notes. Thus, in Carpenter v. Longan, the United States Supreme Court announced the classic statement of this rule: “The note and mortgage are inseparable.... An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.

 

[beaujolais]

WOW ! Thanks again, so very much - for your help, knowledge and all the time you put into your responses.

I just printed some of this thread to take with me to read & digest at work tomorrow. (We are allowed to do that if we have any free time when we don't have cases.)

who possesses the right to foreclose on a mortgage. No one knows who the mortgagee is, and so you don't know who might turn up one day claiming that right...yes?

Yeow. Craziness. Great MERS article. I will print and read that also. I find this all fascinating, besides extremely important.

Congrats at being near pay-off, btw !

Where I'm at in the process is right now, I'm waiting for a real estate agent to e-mail me a letter saying what the value of this co-op probably is at this point. TD Bank said they needed a good approximate on current value. (The real estate agent is in my complex; she did is doing this as a favor for me as she is friends with the complex superintendant; who I am friends with; she is supposed to be credible.) Also, the Chase Bank mortgage person is supposed to get back to me. Besides TD Bank, I'm looking into Chase as I've heard good things about them.

Valley Bank is a newer one that seems to be good and have good prices on a refinance but I have concerns about them being not as established at this or well known, perhaps?

Now, someone in the complex recently closed on a two bedroom (which is what I have) at a very low selling price, as the seller had to move quick. I was told that will hurt the value of my home for the refinance. I realized that I don't know why this would hurt it as, wouldn't the Bank just make me a smaller mortgage due to the reduced house price? That seems like a good thing as the monthly payment might be smaller?

Again, I can't thank you enough. I'll update you when things progress and I find out the info. So, what I do want to ask the potential is lenders, also, is who holds the mortgage and who holds the note?

Good karma to you for all your help ! Appreciatively, sonoma

 

[ksinger]

OK..now that I've dumped all THAT on you...here is one of the articles that started me down this research path a while back. Please note that it was written this year, so this is still going on.

http://www.thefiscaltimes.com/Articles/2012/01/27/The-New-Mortgage-Crisis-Welcome-to-Hell.aspx#page1

 

[movie zombie]

another point for california residents because it is california law [and a few other states]:

your original mortgage with your original lender is a "no recourse" loan. what's that mean? it means that if for some reason your underwater [financially] house that you bought for $500k but the bank took back and was only able to sell for $300k, you are not on the hook for the remaining $200k.

if you refinance your home with the same lender you still have a "no recourse" loan and the above applies.

if you refinance your home with a different lender, you have lost legal protection. if that bank takes back your home and sells it but that $200k difference is there, well, you're on the hook for it!

if in california or a state that has the same law, be very very careful with your refi.

 

[chrono]

I started out with a loan from a local but national bank, then later refinanced to Citibank which at that time offered a very good rate. Later, Citibank sold my mortgage of to Fanny Mae / Freddie Mac although Citi still takes care of my account. I am able to reach a live person via telephone within business hours. My first loan was the standard 30 year with the option to make extra payments towards the principal and payoff without penalty. Shortly afterwards, I changed it to an automatic 2 week payment in order to pay it off sooner. This dropped the payment period from 30 years to around 22 years or something like that. It seemed like a great middle ground where I wasn't locked into the full 30 years but neither was I prepared to handle the bigger payment of the 15 year loan. A few years later, since rates were low, I refinanced again, this time to the 15 year, again selecting a fixed type with no early payment penalty. I was able to do this because my income increased annually, so I put those increases towards the mortgage and having the interest rates dropping helped. I have 8 years to go before I am free of the debt.

 

[beaujolais]

Wow, what a wealth of information. I can't thank you all enough.

Does PSA mean Pricescope Advice, I'm wondering?

Movie: I'm no longer in Calif. but I will see if that applies in New York. That is really important. Thank you, thank you, thank you, . . . !

Chrono: Again thank you for always helping me. xxxoooo Well, it sounds like Citibank is good to deal with, so I may look into them,too, then. Thank you so very, very much for your input. It sounds like you have a great career, btw. For what I do in medicine, there are only minimal periodic increases in pay after you've been in the field for 10 yrs. or so (sigh). Ah, could be worse, I guess - lots of people don't have work nowadays . . .

Ksinger: Found out about my current mortgage as per your suggestion. Fannie Mae holds the note, HSBC services the loan. I really appreciate all the help and articles. I'm finding it pretty interesting (and very important) to learn about. Will update with any updates as things progress. I've learned so much from you. Again, good karma will come your way.

Again, ya'll are the best ! ! !

 

[chrono]

PSA - Public Service Announcement

Always a pleasure to help out any PSer in any form or fashion. I especially like to read what you are up to too. I hope you get your housing stuff sorted out soon in your favour. It helps that I work in a very technical field so the demand stays constant and the pay is competitive. One would think that the medical field would be the same so I'm surprised to read that that isn't the case.

 

[beaujolais]

Just updating to say that I'm in the process of getting the refinance with TD Bank. Their rates were about as good as I found and they have great customer service. I didn't realize that I had to provide them with so many different documents, though. It's been more time consuming than I thought. Eh, so it is . . .

Ksinger, thanks for all the links & all that I learned from them.

Again, thanks dear friends for all your help. You always come through.

xxxooo
sonoma

 

[ksinger]

Just updating to say that I'm in the process of getting the refinance with TD Bank. Their rates were about as good as I found and they have great customer service. I didn't realize that I had to provide them with so many different documents, though. It's been more time consuming than I thought. Eh, so it is . . .

Ksinger, thanks for all the links & all that I learned from them.

Again, thanks dear friends for all your help. You always come through.

xxxooo
sonoma

Hi sonomacounty, you are very welcome. I'm glad to hear that your refi is moving ahead and that you feel good about it. And while it IS a hassle providing so much paperwork, I'm glad to know that your lender is doing due diligence - too many didn't for far too long.
It's better for everyone in the long run.

Best of luck!

 

[justginger]

another point for california residents because it is california law [and a few other states]:

your original mortgage with your original lender is a "no recourse" loan. what's that mean? it means that if for some reason your underwater [financially] house that you bought for $500k but the bank took back and was only able to sell for $300k, you are not on the hook for the remaining $200k.

if you refinance your home with the same lender you still have a "no recourse" loan and the above applies.

if you refinance your home with a different lender, you have lost legal protection. if that bank takes back your home and sells it but that $200k difference is there, well, you're on the hook for it!

if in california or a state that has the same law, be very very careful with your refi.

I find this very surprising. The bank has to take a $200k hit because YOU bought a property that sank like a stone? Seems unfair....but if it goes the other way, what happens? Say you buy a $500k house and the bank forecloses, but sells it for $700k. Where does that extra $200k go? If it goes to the bank, then I guess it all evens out.