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Unsolicited Offer from Wells Fargo for Free Refi
2010 Oct 14, 1:46pm 2,693 views 11 comments
by juan follow (0)
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I also wondered if there was something about the original loan that put the lender at risk. So they wanted to get rid of that loan. But, if you are happy with the rate and terms and you READ ALL THE DOCUMENTS YOU SIGNED, then you win.
I suggest you run the numbers on a rate calculator to evaluate whether prepaying on your principal makes sense for you. If you're planning to stay a while, you can save interest and shave years off your loan term by scheduling extra principal payments into your budget. I wish had started this practice years earlier.
justme
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2010 Oct 16, 3:38am
another reason they did it may be to move you from non-recourse to recourse
Good point. Juan, can you comment?
Or does anyone know whether a refi automatically becomes recourse loan, even if you take no cash out in the process?
Mark_LA
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2010 Oct 16, 4:37am
another reason they did it may be to move you from non-recourse to recourse
Good point. Juan, can you comment?
Or does anyone know whether a refi automatically becomes recourse loan, even if you take no cash out in the process?
Unless you specifically ask for and make sure you get a non-recourse loan on your refi, then they'll most likely push a recourse loan on you. You need to negotiate it, it's no longer automatically non-recourse like when you first got a loan to pay for a house. Now you're getting a loan to pay another loan, even if there's no cash out or payoff of a second recourse mortgage with it.
Most people don't realize this when they refi. Heck, most people don't even know what a non-recourse loan is since they would never expect to be in a situation where the price of real estate goes down...not since 2006 have people cared about "recourse" vs "non-recourse".
Cvoc13
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2010 Oct 16, 1:18pm
another reason they did it may be to move you from non-recourse to recourse
SHAZAM I bet dimes to dollars this is the reason., As now it CAN'T BE A PURCHASE loan, as you said, it is a NOW a REFI and therefore RECOURSE even in a NON RECOURSE state... That could be one big reason, the other BIG reason, could be some thing might have been "improper" on the first loan?
Cvoc13
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2010 Oct 16, 1:30pm
I think a commenter on Mish’s blog hit the nail right on the head: They are only offering these too good to be true free refi’s to those who they don’t have clear title on (they lost the note). They refi you & all of a sudden all the documentation is in order without you suspecting anything.
THERE IT IS... THERE IT IS... THERE IT IS... I say between the recourse and getting all docs in order wala you are doing them a favor, I am wonder if you could challenge and make them PROVE THE PAYOFF went to the LAST NOTE and or TITLE I am talking as a nincompoop now, but you understand what I am saying.
elliemae
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2010 Oct 16, 2:05pm
I have a wf loan, refi'd with minimal charges. Dropped my interest from 6% to 4.3%. I don't think there was anything suspicious about the refi you mentioned - just that they have a good paying customer and can keep them by refi rather than lose them to another company.
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i got an incredible sounding call from my well fargo (WF) mortgage broker a few weeks ago. WF offered to reduce my interest rate to 4.375% and reset my 30 year fixed mortgage to a new 30-year fixed, for free.
now that the deal has closed, i haven't found any gotcha; no closing costs, no prepayment penalties, just a lower rate. even the WF notary did not charge us.
besides myself, a co-worker was refi-ed in july. another co-worker got a call from B of A at the end of september offering to refi his mortgage for free.
i bugged the broker about why he thinks WF is doing this. he said they are trying to refi 100,000 loans per month. even though my mortgage wasn't at risk, the 'system' does a sweep of all loans and picks some for the offer.
mish had a post on this also....strangely the day i got the call from the wells fargo broker.
http://globaleconomicanalysis.blogspot.com/2010/08/benevolence-by-jpmorgan-jpmorgan-offers.html
i am suspicious that the government is underwriting some of the cost of the transfer. there is the obvious underwriting in that the fed is buying mortgages to drive down the rate. the other, is whether some federal office is paying the bank per refi. evidence of this second type of underwriting would be if these deals go away after the election. afterall, this is a stimulus program. my mortgage payment is lower, so i could spend the difference.
#housing