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Refinancing (or not!) the Subprimers and Others

By
Mortgage and Lending with Christensen Financial Mortgage 385907

I was reading an article about how few people could actually take advantage of the current low rates. And it appeared that the emphasis was on the new, more restrictive quidelines. Actually,

I couldn't disagree more!

I'm not sure how all/most loan officers dealt with their subprime clients, but in my case a bit of counseling went along with the mortgage application. They were told that if they corrected the problems that they might have a chance of refinancing to a lower rate. They were also told that if they didn't, they couldn't.

Well, many continued to pay as they had, and are stuck with what they have. To a certain degree they are use to it. Unfortunately, some people have a history of late payments and have always been paying higher rates for credit cards, car loans, and whatever other credit they have acquired. It's not just their mortgages, it's all the credit. And for some, it's not likely to change.

We also have some people who had subprime loans who have refinanced. Are you ready for this;

Into brand new subprime loans. They took whatever equity was available.

Amazing!

Then we have those that have good credit. The credit is good enough that the investors gave them equity lines up to 100%

or;

More!!!

Remember the 125% loans. They don't have any equity because they took it, and

More!!!

In many cases they lived off of it. You can figure out why.

Then in many areas the market declined, but it's too easy just to say the market took their equity, because the homeowner had already done that, with the encouragement of the investors.

Pretty cool, don't you think.

Now the investors have realized how foolish they were, and are acting in a prudent manner. That seems to be very responsible behavior to me. I hope they continue.

So let's not discourage the new guidelines. Let's encourage it. We need this.

And learn to live with it!

It's not part of the problem,

It's part of the solution!

 

 

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