refinance

HARP refi: one homeowner's success story

Couple standing in a field looking at their dream house drawn in the clouds
Highlights
  • Homeowner spent six months trying to get mortgage refinance.
  • Three times, the deal fell apart at the closing table. Fourth time was the charm.
  • Sheer determination and an ability to outlast the lender pay off.

A HARP refi isn't always fast and easy. Ask Joseph DeLucia, who got a mortgage refinance under the Home Affordable Refinance Program. From application to closing, the process took six months.

His refinance rate is a lot lower than the rate on his original mortgage, and the payment is $300 per month less. DeLucia says the savings make the months of frustration and lost sleep worthwhile.

"My advice to anyone would be: Don't give up," he says. "Just hang in there if you really want it."

The HARP refi enables homeowners to refinance, even if plummeting property values have left them owing more than their homes are currently worth. A homeowner can get a HARP refi for up to 125 percent of appraised value.

Loan modification -- before and after
2006 purchase2009 refinance
Loan amount$256,000.00$245,000.00
Mortgage rate6.25 percent4.75 percent
Monthly principal and interest$1,576.24$1,278.04
Price (2006)/Appraised value (2009)$268,000.00$225,000.00
Loan to value95.5 percent108.9 percent

DeLucia bought his house on the bay side of the New Jersey shore in 2006. Property values already were declining. In early 2009, DeLucia read on Bankrate.com that rates had fallen. He owed more than the house was worth, so a HARP refi was his only option.

He applied with his current servicer May 1, 2009. He closed Nov. 5. In those six months, he spent dozens of hours on the phone, sent scores of emails and engaged in at least two screaming matches.

Here are some tips gleaned from DeLucia's experience.

Expect nothing to go smoothly

DeLucia, an architect who is about to become fully licensed, was ensnared in a mistake from the beginning. He applied over the phone, and the loan officer misspelled his name as "Delusia." It was his servicer's error, but it was up to DeLucia to spend time and effort to fix it. He even sent a photocopy of his driver's license.

He was assigned to a loan officer. Later, he was switched abruptly to another loan officer, who needed documentation to be re-sent. DeLucia faxed documents, and when they were misplaced, he faxed them again. At the end, he was stood up at the closing table three times; the fourth time was the charm.

If possible, email documents instead of faxing them

After a few lost faxes, DeLucia began scanning documents and sending them as attachments to emails.

"That way, they couldn't say, 'We didn't get the fax,'" he says. "I didn't get as much runaround."

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Email's electronic trail proved handy.

"There were occasions where they said, 'We didn't get this,' and I said, 'Yeah, you did,' and I forwarded the original message," he says.

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