Quicken Loan's VA Streamline Process Not Good
Complaint
Vashun Cole
Country: United States
I rarely write these, but felt the need to inform others. Simply put, I would STRONGLY advise veterans with VA loans to consider going to another lender if considering a refinance loan through the VA streamline option, also known as IRRL (especially if you are only looking for an interest rate reduction).
Upfront Fee: First, initially I felt a little uncomfortable when Quicken Loans requested that I provide $400 upfront--charged to a credit card--to cover the cost of an appraisal and credit report in the event "you decide to back out of the refinancing process after the underwriting process begins." Quicken does not want to cover the costs of these items if you back out, BUT it would be applied as a credit to the closing costs or UP TO $250 could be refunded at closing. I was told by Quicken Loans that VA requires an appraisal of the property for the streamline. Not True!
I later found out that VA says that "No appraisal or credit underwriting package is required by VA. You should be aware, however, that lenders may require an appraisal and credit report anyway." http://www.benefits.va.gov/homeloans/irrrl.asp.
Okay, my experience, all was going well. Then:
Second Mortgage Lien: After the underwriting process began, I'm told there is a problem with me having a 2nd lien on my property because VA would not allow the streamline to process with a second lien. I have an outstanding home equity loan on the property--considered a 2nd mortgage. Therefore, to continue processing, I could either go with another loan option (opposed to the VA streamline) where this remaining home equity loan amount would be assumed, OR I could just pay of the loan now or at closing. Therefore, as required by VA, Quicken would be the only lienholder on the loan. Not true!!
I later find out that "No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage." http://www.benefits.va.gov/homeloans/irrrl.asp.
So, technically, Quicken was not truthful, they only needed to get my home equity loan lienholder to subordinate to the new VA loan. My lender on that loan is a credit union, and from what I'm told, they are very easy to work with in these kind of matters. Since I wanted to continue the refinance, I decided to sell some long-held mutual fund shares that I possessed to just pay off the home equity loan at closing.
Unreasonably low home appraised value: Next, I'm told there is a problem with my appraisal. Based on their market sales appraisal that was done for my home, it came back as $60,000 lower than anything I've found that show home values for my home. I look at the comparables that were used and there are not similar to my home, but they just sold recently in my neighborhood. I check with my tax assessor's office, and they agreed that the comparables used in that assessment would hold up for a challenge to my property tax bill because the appraisal was NOT based on "real" value of the home.
Okay, obviously I cannot challenge the appraisal that Quicken conducted even though they admitted that something appeared off. However, I was told that it would be difficult to get VA to agree to a second appraisal for verification. So, I was presented with either 1) bringing the difference between the "appraised value" and the refinance loan amount to cover my existing loan....some $50,000, to closing, OR 2) discontinuing the loan process.
I discontinued the refinance process with Quicken!!!
It would appear that Quicken conveniently combined VA Streamline requirements and their own Quicken Loans requirements/rules for granting a streamline loan. I have researched this, and found out that several lenders DO NOT require an appraisal because the purpose of refinance to assist VA loan homeowners with lowering their interest rates. As for my upfront $400, I was told that it will NOT be reimbursed to me because Quicken had to pay for the appraisal and order credit reports to process the loan.
So, I waisted about 3 weeks AND $400 dealing with Quicken and have nothing at this point to show for it. OH YEAH, I was told that since I paid for them, I get copies of the appraisal and credit reports. I did not want an appraisal and credit reports, I wanted to refinance my VA home loan. As for the mutual fund shares that I sold to pay off the home equity loan lien on the home to get this loan, well I can now pay off that loan, BUT will probably have to pay taxes on the sell!!!!!!!!!!!!!!!
Given this unfortunate situation, Quicken could have offered to refund my $400 at the very least. Nope, I got a "nice working with you and good luck finding a VA-approved lender that does not require a property appraisal." Save yourself the hassle, find another lender!!!!
Fellow vets, get real familiar with the VA rules for refinancing through this option.
Upfront Fee: First, initially I felt a little uncomfortable when Quicken Loans requested that I provide $400 upfront--charged to a credit card--to cover the cost of an appraisal and credit report in the event "you decide to back out of the refinancing process after the underwriting process begins." Quicken does not want to cover the costs of these items if you back out, BUT it would be applied as a credit to the closing costs or UP TO $250 could be refunded at closing. I was told by Quicken Loans that VA requires an appraisal of the property for the streamline. Not True!
I later found out that VA says that "No appraisal or credit underwriting package is required by VA. You should be aware, however, that lenders may require an appraisal and credit report anyway." http://www.benefits.va.gov/homeloans/irrrl.asp.
Okay, my experience, all was going well. Then:
Second Mortgage Lien: After the underwriting process began, I'm told there is a problem with me having a 2nd lien on my property because VA would not allow the streamline to process with a second lien. I have an outstanding home equity loan on the property--considered a 2nd mortgage. Therefore, to continue processing, I could either go with another loan option (opposed to the VA streamline) where this remaining home equity loan amount would be assumed, OR I could just pay of the loan now or at closing. Therefore, as required by VA, Quicken would be the only lienholder on the loan. Not true!!
I later find out that "No loan other than the existing VA loan may be paid from the proceeds of an IRRRL. If you have a second mortgage, the holder must agree to subordinate that lien so that your new VA loan will be a first mortgage." http://www.benefits.va.gov/homeloans/irrrl.asp.
So, technically, Quicken was not truthful, they only needed to get my home equity loan lienholder to subordinate to the new VA loan. My lender on that loan is a credit union, and from what I'm told, they are very easy to work with in these kind of matters. Since I wanted to continue the refinance, I decided to sell some long-held mutual fund shares that I possessed to just pay off the home equity loan at closing.
Unreasonably low home appraised value: Next, I'm told there is a problem with my appraisal. Based on their market sales appraisal that was done for my home, it came back as $60,000 lower than anything I've found that show home values for my home. I look at the comparables that were used and there are not similar to my home, but they just sold recently in my neighborhood. I check with my tax assessor's office, and they agreed that the comparables used in that assessment would hold up for a challenge to my property tax bill because the appraisal was NOT based on "real" value of the home.
Okay, obviously I cannot challenge the appraisal that Quicken conducted even though they admitted that something appeared off. However, I was told that it would be difficult to get VA to agree to a second appraisal for verification. So, I was presented with either 1) bringing the difference between the "appraised value" and the refinance loan amount to cover my existing loan....some $50,000, to closing, OR 2) discontinuing the loan process.
I discontinued the refinance process with Quicken!!!
It would appear that Quicken conveniently combined VA Streamline requirements and their own Quicken Loans requirements/rules for granting a streamline loan. I have researched this, and found out that several lenders DO NOT require an appraisal because the purpose of refinance to assist VA loan homeowners with lowering their interest rates. As for my upfront $400, I was told that it will NOT be reimbursed to me because Quicken had to pay for the appraisal and order credit reports to process the loan.
So, I waisted about 3 weeks AND $400 dealing with Quicken and have nothing at this point to show for it. OH YEAH, I was told that since I paid for them, I get copies of the appraisal and credit reports. I did not want an appraisal and credit reports, I wanted to refinance my VA home loan. As for the mutual fund shares that I sold to pay off the home equity loan lien on the home to get this loan, well I can now pay off that loan, BUT will probably have to pay taxes on the sell!!!!!!!!!!!!!!!
Given this unfortunate situation, Quicken could have offered to refund my $400 at the very least. Nope, I got a "nice working with you and good luck finding a VA-approved lender that does not require a property appraisal." Save yourself the hassle, find another lender!!!!
Fellow vets, get real familiar with the VA rules for refinancing through this option.
Comments
Last year's income was >$400K and I started my own business in October. I inquired about the process and the VA is underwriting the loan and there is NO requirements for Income verification (I am a small business owner an paying myself the minimum required by law as I start my business).
Quicken came back and stated "our policy is that you have qualifying income." Well- I have the income to finances to pay the loan today - and it's one of two residences - and I have a perfect credit score....
I think it is ok for them to have their own standards - but I was frustrated with the process as well.
1 call to Wells Fargo - and I had all of the information I needed and assurance that they could handle the loan.
Bottom line - if you are a Veteran looking to finance or refi a loan - I HIGHLY recommend that you look at a lender that is a LOT more versed in servicing loans for veterans - and Quicken loans did not seem to have the experience required to support my needs.
The poster above is dead on - read the regs - and find the right lender so you don't waste your time or get screwed in the process.
Frank