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I'm trying to refinance my condo in a suburb of NY. I was told by a friend that conforming loans in my area is for any amount under $729K (my loan is less than that).

Now, the bank I'm dealing with is telling me that since I'm in a condo, that I am not eligible for a conforming loan. I tried researching this but cannot find anything to confirm this. I'm trying for a 5/1 ARM.

Does anyone know if this is true?

Thanks!

GS

jveenstra · Posted: Mon Feb 01, 2010 2:56 pm Post subject: Condo

High Balance Conforming loans are up to $729,750 in designated high cost counties.
However, that is for 30 year fixed and 15 year fixed. That is ok for condos.
It is not ok for 5/1 ARM. ARMs are capped at $417,000.

Is the existing mortgage a Fannie Mae or Freddie Mac owned mortgage?

Depending on loan to value, a portfolio loan could work. What is amount of loan and estimated appraised value?

Do you know if your existing mortgage holder participates in the CEMA process. If yes, good. If not, you will have to pay the New York mortgage tax again.

What county is the condo in?? There are some special condo ARMs for specific counties.

bg0427 · Posted: Mon Feb 01, 2010 7:07 pm Post subject:

Your condo should not be an issue as long as it fits into the loan limits in your area. The loan limits apply to single family homes and condos. I know of some lenders that will do arms up to conforming limits so search around you will find one.

tfaulhaber1 · Posted: Tue Feb 02, 2010 8:38 am Post subject:

You shouldn't have any issues whether it's a conforming or high-balance conforming loan. The current bank you work with doesn't have a product to satisfy your mortgage needs which means you need to move on. If you know your credit scores and loan scenario, shop around. You'll be able to find financing.

Guest

Thanks for all of the replies.

John - I'm not sure if my existing loan is Fannie or Freddie. My current load is with Bank of America.

I've had some issues trying to refi with other lenders. I tried Wells and I was approved but after months of waiting they would not approve my condo complex.

I went to a broker recently but he said that BOA wouldn't approve the CEMA. Not really sure if this was true because it was approved when I went through the process with Wells.

So now I'm dealing with BOA directly. The property is located in Westchester County.

I spoke with my agent again at BOA and she has confirmed that the reason I can't get a conforming loan is because of the ARM, not because of the condo.

Thanks,
GS

bg0427 · Posted: Tue Feb 02, 2010 11:38 am Post subject:

That doesn't make a lot of sense. Arms are conforming as well as fixed rates. I have been doing this for a long time and have never had an issue approving a loan because it was an arm. I wouldn't put a whole lot of stock into the people you are talking to at BOA. They are a mess right now.

Guest

I think the issue is whether ARMs are eligible for the High Balance conforming loans. My rep at BOA is telling me the same thing that John said above - that ARMs are capped at $417K.

Although I must say that I've tried researching this online and haven't seen this documented anywhere.

bg0427 · Posted: Tue Feb 02, 2010 11:54 am Post subject:

I haven't read that anywhere either. I am going to call one of my underwriters right now and find out.

bg0427 · Posted: Tue Feb 02, 2010 12:26 pm Post subject:

Ok I spoke with my underwriter. As long as the loan meets all conforming guidelines and you are located in a high cost area and can get a du approval everything should be good to go.

tfaulhaber1 · Posted: Tue Feb 02, 2010 12:31 pm Post subject:

CORRECT

jveenstra · Posted: Tue Feb 02, 2010 3:05 pm Post subject: ARM

There are Fannie Mae Guidelines and there are Freddie Mac Guidelines and there are lender guidelines. The lender guidelines are equal to or less than (stricter) the Agency guidelines. Just because Fannie Mae or Freddie Mac allow something does not mean all lenders will do it.

Fannie Mae's loans over $417,000 in high cost areas are called by Fannie Mae "High Balance Conforming Loans."

Freddie Mac calls them "Super Conforming Loans."

Lenders use that terminology or make up their own pet names.

Some lenders only do Fannie Mae loans and some only do Freddie Mac loans and some do both when it comes to loans over $417,000, even if they do both for loans under $417,000.

Some do ARMs and condos only to the PERMANENT high cost area limit of $625,500 while others do up to the TEMPORARY high cost area limit of $729,750 and others will not do ARMs over $417,000

The point is, there is no one single simple answer that covers all lenders. If you are now dealing with B of A, you are stuck with whatever they say. If Wells said B of A does not do CEMA, you may be ok dealing directly with them and not have to worry about CEMA as they may be able to modify their own loan. Such has been the case with people I know who refinance their existing Fannie Mae loan with B of A.

Because B of A is saying their max is $417,000, I'm thinking your loan may not be presently owned by Fannie Mae nor Freddie Mac.

Have you had an appraisal done? Bewteen Wells Fargo and B of A I'm thinking you may know the actual apprasied vale and may shed some light on the LTV and maybe even nthe loan amount. Up to you. WE are addressing a question a little bit in the dark.

Posted: Tue Feb 02, 2010 4:28 pm Post subject: ARM

After researching further, while some lenders will not do it, others will up to 75% LTV. No one will do over 75% LTV, but, a 5/1 ARM can be done up to $729,750 as long as apraised value leaves you at 75% of value or less.

That leaves the question, does B of A do CEMA or not.

jveenstra · Posted: Tue Feb 02, 2010 4:29 pm Post subject: ARM

I am the Guest above

Guest

Thanks again for the feedback.

The amount of the refi is approx $660K. I had two appraisals on my home. One came in for approx $950K and the other appraised for approx $840K.

Regarding CEMA, when I tried to refi with Wells, I was told that BOA does CEMA. In fact, I paid $850 to apply for the CEMA. But when the loan fell through because my condo was not approved I was not refunded the $850.

The last mortgage broker I dealt with told me that he could not get a CEMA from BOA. However, I'm not sure what bank he was working with. Now, I'm dealing directly with BOA so there are no CEMA issues. However, the rates they're quoting me are not as good as Wells and the other broker were offering.

jveenstra · Posted: Wed Feb 03, 2010 9:20 am Post subject: ARM

Unfortunate, for the consumers protection, starting earlier this year, appraisals are not easily transferable from one lender to another.

If the mortgage is $660,000, need an appraisal of $880,000 to work.

Another consumer protection as far as appraisals, lenders can no longer ask an appraiser for a value at no cost and then have him do it if ok. Lenders can not speak with appraisers about value. Thank NY Attorney General Andrew Cuomo for those unwanted changes.

I thought you said, maybe I misread, B of A was not doing CEMAs. That does not seem to be the problem

I am seeing 5/1 ARM rates of 4.25% to 4.625%.

The problem is the appraised value, sometimes.

Some lenders do not accept CEMAs, so, even though the existing lender may do them, the new lender does not always accept them. Very confusing mortgage world.

If the existing mortgage was owned by Fannie Mae or Freddie Mac, would not be a problem as far as appraised value.

All my comments above relate to Agnecy loans, Fannie Mae and Freddie Mac.

We have a portfolio lender that lends in nine counties in NY that goes to 80% of value and that 5/1 ARM rate is 4.625%. They do not lend in New York County. Could be rate and term or cash out. WE get to pick the appraiser from their approved list.
So, you can see, mortgages can be very involved and confusing.

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