Homeowners feel frustrated by the slow rollout of the Obama refinance plan.
"The plan is not as great as advertised (I'm a tax accountant so I'm not surprised)," says Beth Stahlberg, who owns a home in the Denver area.
Under the Obama administration's Making Home Affordable program, homeowners can refinance their mortgages, even on houses that have lost value. There are a few catches: The borrower has to have a clean payment history, the current mortgage has to be guaranteed by Fannie Mae or Freddie Mac, and the new loan can't be for more than 105 percent of the home's current value. You can use Bankrate's handy calculator to find out how your home's value stacks up against your mortgage loan.
The program was conceived as a way to reward responsible homeowners who otherwise couldn't refinance. Obama administration officials announced the plan's outlines in mid-February; more than two months later, mortgage servicers are telling customers that they still await details. Homeowners say mortgage servicers provide contradictory information and quote high fees.
Stahlberg got a rate quote with higher-than-expected fees, and then, "overnight Fannie Mae had changed the program" and even more fees were tacked on. Fannie and Countrywide want origination and risk-adjustment fees of 4.25 percent of the loan amount, plus other closing costs.
After mulling it over for a few weeks, "I held my nose last week and signed on to refi," she says. "We are locked and have dropped our 30-year fixed mortgage into a new 30-year loan that is 2 points lower than our current loan. Since we plan on being in this house for at least 30 years it is unpleasant, but we are 'underwater' and have no other option to drop our rate like that."
Bankrate solicited e-mails from readers who have tried to get loans under the refinancing program. A few say they are satisfied. Most say they aren't. Homeowners blame the chaos on the Obama administration, mortgage servicers and lenders, and Fannie and Freddie.
While it's politically correct these days to blame the mortgage mess on borrowers who supposedly are uninformed, the people who shared their stories with Bankrate are a knowledgeable bunch. They often know more about the Obama refi plan than the mortgage company customer-service representatives who answer the phones.
"On March 27, I spoke to National City and they claimed the details were not available yet," says a homeowner in Eagle, Idaho. "They were supposed to have called back already, but I am still waiting."