The short answer is probably not, for several reasons. For certain borrowers in the earliest phase of the HARP program, their current servicer was the only company that could refinance them. However, today you can get your HARP refi through any participating mortgage lender.
That’s a good thing.
“Easy” Isn’t Necessarily “Cheap”
Your current lender might send you a quote for a HARP refinance without you even asking. When lenders do this, it’s usually because you’re a good customer with excellent credit, and they don’t want you to refinance with someone else. They’re probably hoping you’ll sleep-walk right into their office and sign on the dotted line because it’s easy. This doesn’t mean that your lender’s offer is the best rate available.
Mortgage companies and banks don’t operate that differently from telephone or cable companies – the ones who advertise fantastic deals that only apply to “new” customers. You, the existing customer, may have less perceived value to your lender than the new customers it’s chasing with television commercials, online banners and email. A Canadian study concluded that banks consistently offered better mortgage rates to new customers than they did loyal clients who wished to refinance (“renew,” as they say up North) their home loans. And a similar study of US insurance companies concluded that “loyalty is for suckers."
You should absolutely get HARP mortgage quotes from competing lenders. At the very least, this can tell you if your lender’s offer is fair. Comparing quotes may also provide a starting point for negotiations with your lender – there’s no reason to think that its initial offer is the best rate it can give you. So take a few minutes to get some HARP quotes – unless you’re okay with leaving thousands of dollars on the table when you refinance.
The HARP Refinance Experience
Once your current lender has enticed you into applying for a HARP refinance, it’s probably not highly motivated to close the deal. After all, the sooner your six percent mortgage is converted to a four percent HARP refi, the sooner the lender’s earnings drop. Mortgage lenders have finite resources –personnel and funds – and they’d rather devote these things to activities that will maximize their profit, not lower it. In addition, when lenders have to decide between working to close loans they might lose if they don’t move things along and working to close “captive” loans, the choice is easy. For them.
So your deal will probably get done, eventually, but the experience is unlikely to be efficient or fun.
Your current mortgage lender may in fact have the best HARP refinance for you – but you won’t know unless you check with other lenders first.