As an economist, you might think that I would have refinanced our home as soon as mortgage rates began to fall.
Nope. Delay, delay and delay.
The process of borrowing thousands of dollars is daunting. Throw in a large bank that offers mixed messages and condescending loan officers, and you have a muddle worthy of tears.
President Obama finally spurred me to action earlier this year when I heard him talking about government efforts to help Americans who had little or no equity in their homes refinance into a cheaper mortgage.
I crunched the numbers. He was talking about us.
My husband and I bought our suburban Philadelphia home in 2006, near the top of the housing bubble.
Since then, it had lost about 20% of its value, and we had financed much of the purchase with two loans — a 30-year, fixed-rate mortgage and a home equity loan from M&T Bank.
After one payment, the primary loan was sold and wound up being serviced by Wells Fargo.
So, I did the logical thing and called Wells to inquire about refinancing.
We were valued customers, right?
We had good credit and a spotless payment history despite a bout of long-term unemployment.
The initial call to Wells Fargo went something like this, "Hello, would you be interested in a low refinance rate on a 30-year, fixed-rate mortgage today?"
To which I replied, "Yes!"
Things seemed to be off to a good start.
But the next day I spoke to a customer service rep who asked if we had 5% equity in our home.
Well, of course not — we were almost underwater.
In that case, the rep said, Wells Fargo had nothing to offer us.
Fortunately, I decided to try another lender, Quicken Loans.
I was immediately told that our loan might be eligible to be refinanced under the government's new and improved Home Affordable Refinance Program.
A HARP refinancing would lower our interest rate from 5.8% to 3.9% and reduce the payments on our primary mortgage by $450 a month.
Honestly, I didn’t quite trust Quicken. It all seemed too good to be true.
I decided to give Wells Fargo one more chance.
Unfortunately, I got the same old story.
Wells couldn't help me unless, and I quote, “I had a gigantic amount of cash to bring to closing that would increase my equity."
When I asked about refinancing through HARP, I was told that our mortgage was not eligible because our PMI (private mortgage insurance) provider was not part of the program.
The Wells banker went on to say that Quicken was lying if it said we could qualify for HARP, and I was just wasting my time even talking to them.
While I appreciated his concern, I went back to Quicken.
To make a long story short, we qualified for a new loan through HARP, and we closed at the beginning of November.
Why would Wells act like this?
I can only conclude that HARP loans aren't as profitable as other mortgages, so the nation's biggest mortgage lender just doesn't want to play ball with the government program.
If you've been turned down or discouraged from taking part in the program, especially by one of the big banks, don't give up.
Find another lender. It worked for me.
Jill Beccaris-Pescatore is an assistant professor of economics at Montgomery County Community College in Blue Bell, Pa.