For over ten years, we have had our house financed with Nationwide Mortgage Company, which became Nationstar Mortgage Company based in Dallas, Texas. It was a 30 yr mortgage with a fixed rate. After several phone calls from Nationstar that offered a lower rate, we decided to refinance because we were told we qualified for a 5% fixed annual rate. Months went by while we were told it was being processed. It appeared as though every week there was another bit of information required which was not mentioned early on. Nationstar mailed us preliminary copies of the loan papers and told to sign and return which they needed in order to process the loan. Every time I asked a question, it was met with an exclamation of exasperation. When I asked about certain numbers on The Good Faith Estimate of Settlement Costs, I was told by Ms George of Nationstar, Don't worry, those numbers are going to change anyway, just sign the papers and return them.
Oddly during this process we were still getting calls and letters from other Nationstar reps about refinancing and bringing up this forgiveness policy of Nationstar where they would forgive a certain portion of the principal. I told them I was already working with someone and they told me to be sure and mention this to her.
When I asked Ms. George about this, she told me all it meant is that if I wanted to, I could buy down my principal. That would require me to borrow money to buy it down, which didn't make sense to me as I didn't have the cash to do it and I wasn't going to borrow money to pay it down.
The 5% interest rate quoted was dropped to 4.5% than later back up to 5 with a final rate of 5.8%. This was with a FHA loan. I was offered a new 15 yr loan instead of 30 yr. With payments dropping $25 a month. Hardly any savings at all. I was told this was the only and the best they could do for us.
Finally we were told that the loan was approved and final papers were being prepared. Ms George's supervisor, Mr. Sabbagh, told me to hurry and get the papers signed as we were lucky to get this done because FHA's new requirement for this rate required a higher credit score than what we had. Finally, we signed all the papers and everything was finalized.
Less than two weeks later, I received a letter from Nationstar stating that I qualified for a 25% forgiveness on my loan. The letter stated that on March 4 the US Treasury announced the details of its Making Home Affordable refinance program. This showed a 25% drop in my principal and a $700 reduction in my monthly payment..
Without mentioning my refinancing, I called the number provided and spoke with a Mr. Barnwell of Nationstar and asked about the forgiveness policy and he explained that due to property values dropping they would forgive 25% of the principle. He stated that maximum loan to value could go up to 90% and a minimum credit score of 550 was required. Therefore I would qualify.
I tried to call Ms. George to ask her about this and left messages but she never returned my calls. I called Mr. Sabbagh, her supervisor, and asked him why they did not offer it; he said he didn't know about it. When I asked what he could do for me he said he could not do anything at all. The attitude was so what? There's nothing I can do.
My take on this whole loan process was, don't ask questions, we do the paper work, you sign it ASAP so I can get my commission. With the timing of this whole refinancing process, it appears as though Ms. George and Mr. Sabbagh knew the loan reductions were soon coming but knew it would be hurting their refi commissions so were quickly selling the refis on low interest rates.
When I had asked about the principal reductions she purposely gave me wrong information. When I asked Mr. Sabbagh about it, he denied knowing anything about it.
Both of these are very hard to believe.
George
Elyria, Ohio
U.S.A.
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