I am currently trying to complete a refi.  I have excellent credit and no other debt.  I only have one mortgage on the house.  My appraisal came in below what I owe.  My balance is abound 104% of the value.  I am going to skip over some things but basically the bank:

1)told me about the Home affordable program

2)I said sign me up

3) they said because i was switching banks they cant help me after all

4)I did some research and asked about the DU refi plus program

5) they said oh yeah we can do that

6) I said sign me up

7) they said oh sorry but because you are switching banks you have to be in the 95% range.

8)I replied saying I need to know where they get there information  and that every Fannie Mae document I have read states a number of 105%.

So I need help to find out if the bank can change numbers on me like this or does Fannie Mae hold them to certain guidelines?  I found a several PDF files on Fannie Mae's website listing eligibility requirements for me but what about the bank.  What kind of standard are they held to?  Also if this continues what course of action can I take.  I have already paid a non refundable"good Faith Deposit" and I am in a 5/1 ARM that resets in April.  Thank you for any help.

Even though Fannie Mae allows up to 105% (soon to be 125%) there are lenders that have their own overlaying guidelines that are more strict. There are plenty of lenders that allow up to 105%. I'm not sure what type of lender you are using (broker or banker). However, being told no by your current lender/broker is not the end all be all. You should shop around.

The appraisal could be an issue. Thanks to the lovely HVCC, your appraisal probably won't be transferable. You may have to pay for a second one. If the deal makes sense, it will be worth the extra cost. Keep in mind too that the Fannie Mae refi plus program has a 1 point price adjustment for LTV's between 97 - 105. You may not get the same deal you applied for but it could still be a great benefit depending on your specific situation.

Hi Richard

It is true that more or less the DU Refi plus guidlines are same with most of the banks however some banks do have their additionals rules and eligibility criteria as well.

Who is the current lender

Thank you for the reply.  I am dealing with Suntrust bank.  I know I can go else where but I hate to give up a $625 deposit.  And I get the feeling the bank if dragging their feet so I will get discouraged and give up.  I know the banks are short staffed also so it could be that my rep just doesn't know what she is doing.  Both options really get my blood boiling because when I see the words "good faith deposit" I feel that good faith should go both ways.  If this goes sour Is this the kind of thing I could file with the proper regulatory commission or would it be a waste of time?  Thanks again. 

I think I understand your situation more clearly. SunTrust only allows DU Refi + above 95 LTV when the loan being refinanced is currently being serviced by SunTrust. I work with the wholesale side of SunTrust (broker channel) and we have the same guideline.

Unfortunately Richard, you are stuck in a lender guideline issue. There is little that can be done unless SunTrust changes its guideline in the near future. Maybe you can speak to a manager and demand your deposit back (less the cost of the appraisal)?

Did SunTrust ever advise you of this possiblity when you applied? They should have let you know that if the appraisal caused your LTV to go above 95 then SunTrust would not be able to do the loan.

I'm not a mortgage professional so I can't really offer you professional advice but as a consumer that has gone and still going through the Refi process I suggest putting a little pressure on the lender for a refund.

I can relate because I have gone through the exact same situation of getting a low appraisal that put our LTV >95 % and were going to be charged a point for it. Fortunately, we have some additional funds to put down on our loan so after 2 appraisals (both refunded) we decided to continue to work with our current lender and just locked a decent rate last week with BofA who have said they don't need further appraisals because they know we qualify for the Refi plus program and are using a value in their system for our property that is actually higher than the 2 appraisals we did have. 

I guess my next question is how closely do the banks have to stick to their GFE.  Suntrust gave me a new GFE stating that I would only have to bring enough cash to closing to cover the closing cost.  Two days later they tell me I have to bring the closing cost plus enough cash to bring my balance down to the 95% mark.  I feel that this is a violation of the RESPA.  Not only that but they are still calling it a home affordable load when the only thing in the deal that is from the home affordable plan is the extra point they are charging me for Fannie Mae.  I got the managers number and will speak with her tomorrow.  Thank you for you help.

Your lender is asking you to bring more money in to bring your LTV below 95% and still charging you a point?

Richard,

Suntrust didn't do anything wrong...no RESPA violations here. GFE = ESTIMATE based on known information. Exact pricing isn't known until ALL pieces of the puzzle are together and you've actually locked your loan and a final GFE is sent to you.

FYI...you can get better rates elsewhere so the couple hundred bucks you're concerned with would be saved in interest with a better loan in a matter of months.