Daily Real Estate News | March 25, 2008Second Mortgage Borrowers Struggle
Home owners with both first and second mortgages are finding it increasingly difficult to refinance.
Some of the nation's largest lenders, including National City, that hold a second lien on a property are refusing to sign off on requests to refinance the first note.
National City in an internal memo on Feb. 18 said it was no longer approving such requests nationwide when the first mortgage is with another firm.
Nancy Gusman, a real estate lawyer in suburban Washington, D.C., says she is seeing lender roadblocks "every day now, and it's so counterproductive. All the articles you read quote the bank executives saying, 'Contact us. We want to work with you.' Then they turn around and pull stuff like this."
To get around the problem, a borrower has to qualify for a new first mortgage big enough to pay off both the first and the second lien, which for many would be difficult.
Source: Washington Post Writers Group, Kenneth R. Harney (03/01/08)