topic MIP refund question in Mortgage Loans

MIP refund question

SDChrgrboy2 — Mon, 21 Feb 2011 18:23:29 GMT

I have a question for Shane or someone familar with FHA loans. I recently refied with an FHA loan to an FHA 203 k and just closed. Thie original loan closed in 9/30/09 and I paid $4,352.60 upfront. I looked at the chart on the FHA website and if I looked at it correctly, this would be year 2, month 4 which would entitle me to an refund of approx $2,176 correct? But for some reason WF only is giving me a refund of $1,004. So something seems off.

Am I doing this wrong? Any input would be appreciated

Re: MIP refund question

Anonymous — Mon, 21 Feb 2011 18:44:20 GMT

Often times they use some of this money to cover loan costs. That is where alot of zero out o fpocket FHA refis come from if the loan is in early stages. Not sure if that is the case here, but it is possible.

Re: MIP refund question

ShanetheMortgageMan — Mon, 07 Mar 2011 02:08:16 GMT

You should have a bigger refund if you paid $4,352 in September. I'd ask Wells Fargo for their FHA Connection printout that shows how much of a refund you'd get if the loan closes in X month vs. X month, etc. It's something that every lender gets on an FHA to FHA refinance (whether it's a streamline transction or a full credit qualifying refinance like you did on the 203k).

$1,004 is only 23% of $4,352... which is the amount of refund you'd have if the loan was being refinanced into a new FHA mortgage between the 5th & 6th month of the 3rd year of the mortgage term (not 5th & 6th month of the 2nd year, like it should be). To me it seems like they put in a closing date 12 months after they should have. That FHA Connection printout is the only thing that matters though, so ask your processor to send you a copy or at least bring it up in their system so they can see the amount of FHA refund listed.

Re: MIP refund question

SDChrgrboy2 — Mon, 07 Mar 2011 19:07:52 GMT

Shane, thanks. They did say they made an error. We could have drawn up new documents but I didn't want to delay the closing anymore since we started the process in December. I was told that when Wells receives the MIP refund, they will catch the error and hopefully send me back the $1000. I have called the national center to confimr the amount, but was told it get's sent directly to Wells. I am hoping that it doesnt just vanish

Re: MIP refund question

ShanetheMortgageMan — Mon, 07 Mar 2011 19:42:15 GMT

Welcome. Just be in touch with Wells Fargo every couple weeks to make sure they aren't sitting on it.