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Mortgage Refinance Update

I was able to get a hold of my mortgage broker and have an interesting update about my second attempt at refinancing my mortgage. When I initially talked with this mortgage broker he said that he likes to close within 15 days, which allows him to keep his rates lower than anyone else.

Condo Appraisal

My condo appraisal went really well. It appraised at a value of $280,000. 80% of that value is $1,000 less than what I currently owe on my existing mortgage. This meant I would be able to refinance without any government programs as long as I had the $1,000 plus closing costs to cover the difference. When the 15 day mark came and went I started to worry.

Fannie Mae and Freddie Mac Troubles

I sent a few emails hoping to find out some more information. He finally returned one of my emails and recommended that I call him. When I called him I learned about the Fannie and Freddie’s new attempt to screw me over. Fannie and Freddie are taking 5-10% off the appraised value of every condo.

I’ve previously written about higher interest rates for condo owners. Apparently, Fannie and Freddie did some study that proved condo owners are more likely to foreclose.

Personal Rant

Here I am, a young home-owner trying to refinance into a lower rate, and I’m being blocked because of some study that claims condo owners are more risky. I put my 20% down at closing. I did my due diligence and purchased a reasonably priced condo. My condo’s value has not decreased much. Why am I being prejudiced against? Shouldn’t each case be different and unique. Why do other condo owners affect my mortgage refinancing?

Shouldn’t I be the only person who affects my mortgage loan? I’m the only one applying for the loan. I’m not applying with the other condo owners as partners.

My Remaining Refinancing Options

This unfortunate and prejudiced situation leaves me with two options. I can either hope Fannie and Freddie remove the 5-10% reduction of my appraised value before my rate is no longer valid. Or I can hope a “DU refinance” works to my benefit. As of right now, no condos have been closed using the DU refi program, only single family homes.

The DU refi program would allow me to refinance without PMI at the wrongfully depreciated appraised value. My broker thinks that condos aren’t getting approved for the DU refi program because of the condo association. Apparently, there is a thought that if one person in a condo association doesn’t pull his weight, it will drag the others in the association down. I feel like this is a valid concern, but it shouldn’t prevent a refinance.

I already have a mortgage. Why is it so difficult to refinance to a lower rate that will decrease my payments by $200 a month. Shouldn’t that make it less likely that I default on my payments? I will never understand this issue.

Is anybody else having refinancing issues?

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