The banks have brought this upon themselves.
A few weeks ago, I attempted to refinance my mortgage at BOA - and I assure you that financial qualification is *not* an issue, we have more than enough income to qualify for twice the loan amount, excellent credit, and enough liquid assets to pay off the existing loan by writing a check if we wished.
1) First, I was told that “Our system is overloaded, and we will not be accepting new refinance applications for 3-6 months.”
2) Probably, for 80-90% of callers, that would have been that.
However, in my case I have the personal and business experience to know how to get around this sort of gate-keeping, and after escalating the call up two levels of supervision, I was assigned a loan office.
3) I can’t prove that the application process was designed to discourage applicants, but it might as well have been. Typical example:
BOA: “We need copies of all pages of you MM statement, including the blank pages.”
Me: “I do not keep the blank pages, but I’ll go to the bank, and get a reprint.”
BOA: “The reprint is in a different format than the statements you FAXed in. We will need to have a copy signed by someone at the bank, or something like that.”
Me: “Or something like *what*, exactly?”
BOA: “I’ll have to check that with underwriting. Perhaps you can go on-line and print a copy...”
(I go online. First, in order to get a copy, I have to change over to electronic statements (I prefer paper statements, on which I can make notations).
I then discover that the on line statements are not in the same format as the paper statements. And so on....)
In return for all this, BOA offers me a rate of 4.75%.
So I pick up the phone and call a local Mortgage Broker recommend by a source I trust.
No problem, he can do a HARP II loan (similar to the program we are discussing) at 4.00%, and with none of the bullshit I was getting from BOA.
Now, why would BOA be making it as difficult as possible for existing credit-worthy borrowers to refinance?
I may just be a cynic, but somehow I suspect that it may have something to do with reluctance to exchange a 5.6% loan for a 4.75% loan - let alone one a 4.00%!
B of A had no reason to help you. Why do you need a HARP loan? Any lender can get you 4.00 or better right now. I can....I own a mortgage company.