Refinancing a home that's currently under SONYMA?

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Kevin H

Ithaca, NY

#1 Jul 2, 2010
I purchased a home in 2007 using New York's SONYMA financing program, which offered very low closing costs and at the time, low interest rates.

Fast forward 3 years later, and interest rates are at an all-time low. I'm heavily interested in refinancing my home (which I am currently paying 6.25% interest in a 30-year loan) with a new loan at 4.5% through a private mortgage broker.

I understand that SONYMA does have a federal recapture tax penalty if I were to sell or exchange the home - but is refinancing considered either? Furthermore, I've read on SONYMA's website that the recapture penalty is rarely paid because it is pretty rare, requiring me to get rid of my home under 9 years, have my gross income substantially increase, and home's value also must increase.

I've searched long and hard, and couldn't even contact any SONYMA agents. Is it even financially sound to refinance my home and get out of SONYMA?

Thanks,
Kevin
Jim

United States

#2 Sep 23, 2011
I am in the exact same situation. Please let me know if you have found any answers.

Thank you,

Jim
Eric

Pittsburgh, PA

#3 Oct 24, 2011
Any answers yet? We are in the same exact situation, and desparate to take advantage of record-low mortgage rates. I have asked bank mortgage specialists for advice on this, but no one seems to know about the supposed loopholes to avoid paying the recapture tax.
Yoli NY

New York, NY

#4 Feb 7, 2012
We are in the same exact situation, and desparate to take advantage of record-low mortgage rates. I even contacted someone in Sonyma but the person tried to discourage us from refinanceing, he said that with the Sonyma mortgage even if the interest rate was a little higher then the other mortgage rates we were still paying more into the principal. I also have asked bank mortgage specialists but no one has an answer.
Mark

Syracuse, NY

#5 Mar 26, 2012
Yoli NY wrote:
We are in the same exact situation, and desparate to take advantage of record-low mortgage rates. I even contacted someone in Sonyma but the person tried to discourage us from refinanceing, he said that with the Sonyma mortgage even if the interest rate was a little higher then the other mortgage rates we were still paying more into the principal. I also have asked bank mortgage specialists but no one has an answer.
From SONYMA

Q: Will I be subject to the Federal recapture tax if I refinance my mortgage?

A: No. However, if you later sell your home less than nine years from the original purchase date and meet the conditions described above, the Federal recapture tax may be due.

I am a mortgage broker in NY and would be able to assist anyone in NY looking for help on this.

Please email me at markh@territorymortgage.com

Mark
Thomas Cavanagh

Dallas, TX

#6 Jul 30, 2012
Mark wrote:
<quoted text>
From SONYMA
Q: Will I be subject to the Federal recapture tax if I refinance my mortgage?
A: No. However, if you later sell your home less than nine years from the original purchase date and meet the conditions described above, the Federal recapture tax may be due.
I am a mortgage broker in NY and would be able to assist anyone in NY looking for help on this£I.
Please email me at markh@territorymortgage.com
Mark
i have a sonyma mortgage. I purchased my LI home in October of 09.My bank that I have it Through is Astoria Federal. Me and my girlfriend are both on the deed.My interest rate 5.75.My girlfriend recently went bankrupt. Will we still and can we refinance? Please email me at cavsjets21@aol.com
YW in Booklyn NY

Brooklyn, NY

#7 Sep 1, 2012
I am a SONYMA lender too. I purchased my home 10 years ago this month so I'm not inquiring into the recapture tax although I tried unsuccessfully many times throughout the years and never got a straight answer. First of all no one at SONYMA can or will answer the recapture/refinance question and no one at the Bank wants to. Right now I'm paying an extra 2% on a Sonyma loan that's supposed to help low income folks in their dream of home ownership. I think SONYMA should let everyone out of that recapture tax or start a program to refinance those loans free of charge because the general interest rates now are much lower than SONYMA'S.
YW in Booklyn NY

Brooklyn, NY

#8 Sep 1, 2012
correction: I am not a lender I got a SONYMA loan.
Niece

Bronx, NY

#9 Nov 7, 2012
I have the same problem. I just read that a person can apply to be reimburse the recapture tax through SONYMA if the loan was taken on or after July 17, 2007. Check the website.
Robert Michaels

Garden City, NY

#10 Nov 16, 2012
I have a Sonyma with MI each month. My home has devalued from the original purchase price by about $104,000. Plus my mortgage is $73,000 more than the value of the house. Adding insult to injury I have to pay Mortgage Insurance in the amount of $145.86 per month.
Since I'm underwater I need to refinance. I have tried to contact Sonyma to get "striaght" answer but all I get is a run around and they want all my info so they can turn me over to one of their mortgage brokers/lenders.
Under the HARP programs and the FHA programs there are relief refi available regardless of how deep underwater you are. But Sonyma doesn't seem to understand what I wish to do and hasn't offered one ounce of help to me. Other than we'll take your info and put you in touch with someone.
That's is BS. The program was set up to make home ownership more affordable. The HARP program is to help people take advantage of these lower rates, so has the FHA Streamline program, why is the government of The State of New York so Ass Backwards and not looking to help it's borrowers. Instead wants to keep them, and encourages them to stay in the High Interest Loans!!!!!!!!! I'm sorry I don't get it.
Ben C

Deer Park, NY

#11 Jan 28, 2013
I am in the same boat as all of you. Wondering if anyone has had any luck with Refinancing? I have met with three banks so far and no one will touch it. Was thinking of getting a broker to help. Any info would be appreciated greatly.
thanks!
Katie

Mastic Beach, NY

#12 Feb 9, 2013
Q: Will I be subject to the Federal recapture tax if I refinance my SONYMA mortgage?

A:
No. However, if you later sell your home less than nine years from the original purchase date and meet the conditions described above, the Federal recapture tax may be due.

http://www.nyshcr.org/AboutUs/FAQ/FAQ.htm...
Matt

Farmingdale, NY

#13 Apr 19, 2013
Hey all..Im in SONYMA HELL and have been given the runaround by Bank Of America in terms of any sort of Re-Fi..Im now starting to get in touch with SONYA Directly. My wife lost her job a month and a half ago and the noose is starting to tighten up. We purchased our home in October of 2007..I'm looking for NAYONE who knows teh answers to this ungodly complex loan and if assistance is available. Thanks.
Matt

Farmingdale, NY

#14 Apr 19, 2013
Katie wrote:
Q: Will I be subject to the Federal recapture tax if I refinance my SONYMA mortgage?
A:
No. However, if you later sell your home less than nine years from the original purchase date and meet the conditions described above, the Federal recapture tax may be due.
http://www.nyshcr.org/AboutUs/FAQ/FAQ.htm...
Katie..how are you making out with things?
Mark

Fayetteville, NY

#15 May 8, 2013
Ben C wrote:
I am in the same boat as all of you. Wondering if anyone has had any luck with Refinancing? I have met with three banks so far and no one will touch it. Was thinking of getting a broker to help. Any info would be appreciated greatly.
thanks!
Hey Ben,

I have refinanced people out of Sonyma loans many times. I am confused as to why banks wouldn't touch it.

I am located in upstate ny and work as a mortgage broker. Shoot me an email and I will see if I can help.

markh@territorymortgage.com
Sandy

Stony Brook, NY

#16 Jun 1, 2013
Hi,
I am also stuck in a Sonyma Mortgage, and have asked the Bank holding the mortgage. They cannot and will not help. I've tried other bank, none of which can help, due to the value of my home being less than what I owe. With all these gov't programs now available to help struggling homeowner, I feel Sonyma is being unfair in not wanting to help people having trouble making their monthly payments. I am one payment behind...and NEVER EVER had this problem before. But also due to my taxes (thanks to state) steadily increasing since I purchased my home 10 yrs ago, it has made my mortgage payment skyrocket, to an amount no longer manageable. Has anyone worked with MarkH at Territory Mortgage. It's so hard to know who to trust with your money these days. Scams are rampant with the server economic turn. I just could not take a chance like that with my home. Anyone who has refinanced with MarkH please let me know of your experience. Thanks.
YW in Booklyn NY

Brooklyn, NY

#17 Jun 5, 2013
Well I'm back again. After posting last year, I have no solution to report. I tried to refinance with the bank that holds my SONYMA mortgage which is Astoria. I had to fill out about 2 days worth of paperwork and after all of that I was told that I do not qualify for CEMA which everyone else with a regular mortgage qualifies for(its a program in which you can transfer the tax paid from the first mortgage to the refinance loan & you dont have to pay it a second time).SONYMA does not allow that. So if I want to refinance I will have to pay $10,000 min. in fees and taxes because I have a SONYMA mortgage. It seems that SONYMA is a trap for unsuspecting people. It's time for SONYMA to take the yoke off of our necks and do what the program was supposedly intended to do ..offer lower interest rates to its borrowers.
CS in WNY

Buffalo, NY

#18 Aug 13, 2013
I purchased my home 5 yrs ago using SONYMA through HSBC. I am trying to RE-FI and was told HSBC says I will have a $99,999.99 penalty.?? Is there a penalty if I am not selling my home but rather refinancing?
Buffalo area

Alexandria, VA

#19 Aug 13, 2013
We refinanced through a different company and didn't have to pay a recapture. Look at the fine print on your SONYMA contract to figure out your worse case sonario. Due to my husbands income at the time, we were fine. Then we sold our house after 6 yrs and didn't have to repay anything either. We were lucky. I contacted SONYMA - my mortage company that I was leaving gave me a great contact number for a wonderful lady with SONYMA. Good luck to everyone.
sajjad

Flushing, NY

#20 Oct 19, 2013
SONYMA IS FRAUD, I LOCK IN MY MORTGAGE INTEREST RATE AT 3.5% AND THEN THE M&T bank could not close the loan timely due to so many processing at their end now they increased my interest rate from 3.5% to 4.875% and I had to close otherwise my down payment would have been lost.
They hook up you and then you have no choice.

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