Refinancing - The Main Problem - Loan to Ratio

Real Estate Agent with National Realty Centers

Why isn't Congress or anyone addressing one of the main issues regarding refinancing?  Everyone is concentrating on helping people overcome the foreclosure problems. People that shouldn't have gotten approved for loans from the get go..and now have bad credit and are being driven to walk away from their mortgages, these are the people our government want to bail out.

I haven't heard any discussions or solutions for the people who have good credit, pay their mortgages on time, but yet the banks are not willing to help them in refinancing to save their homes. They want these customers to add additional thousands of dollars to be able to refinance their mortgage because of the loan to ratio issue. Why would anyone want to add more money to property that is already loosing money?

Anyone agree with me?

Janice Matthews

Comments (12)

Michael S. Mackey
CENTURY 21 All Islands - Mililani, HI


I agree with you. There is no logic to what the focus is on. People who made bad choices and decisions are getting the helping hand; those who have been prudent but are suffering the effects of this economy are being pushed aside.

Feb 15, 2009 12:08 PM
Christina Moock
Cutler Real Estate - Canton, OH
REALTOR - Cutler Real Estate

Yep, I agree.  I'm stuck in my current house forever.

Feb 15, 2009 12:10 PM
Steve Loynd
Alpine Lakes Real Estate Inc., - Lincoln, NH
800-926-5653, White Mountains NH

Janice, I had a comment-response, to a blog today that a mortgage rep was suggesting that Fannie Mae loans will be able to re-fi with no appraisals and stream-lined closing costs. If the Government would require banks to allow lower rates at the current principal loan amounts (regardless what the equity position is) and as long as they were not a cash out would save a lot of people from loosing their homes. Agreed.


Feb 15, 2009 12:36 PM
Sergio Rebollo Jr.
Real Estate TeamMates - Miami, FL

Janice......Welcome to ActiveRain.  This is a great community to network with others as well a great place to learn from other's experiences and knowledge.  I've enjoyed it; I hope you enjoy it as well.

Sergio Rebollo Jr.
Exit Prime Realty
Coral Gables, FL  33146

Miami Short Sale Specialist - Profile

Feb 15, 2009 01:04 PM
Vicente A. Martinez
Prudential Douglas Elliman Licensed Real Estate Salesperson - Woodhaven, NY
Realtor, Brooklyn - Long Island - Queens Homes

Hi and welcome to active|rain.

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Feb 15, 2009 01:18 PM
Dean Curtis
Coldwell Banker Kittitas Valley Realty - Ellensburg, WA

Janice - I am assuming that you are expecting folks to roll their refinance costs into their mortgage? I know that is what I have always done on a refinance. So now the difficulty is that the lenders want the loan origination fee and appraisals paid out of pocket? I would assume that the ratio you wrote of is the homes loan to value ratio, as apposed to the owners loan to debt ratio? After thinking about the situation as you put it, I figure that the banks know that their collateral (the home) is not worth what it originally was, and as such they do not want to add to the principle by rolling the fees into the loan thus making it a larger investment on their part. Or else they just want to tap the owners for cash to try and discourage them from refinance to keep the higher rate. Just a couple thoughts on my part. Dean

Feb 15, 2009 02:08 PM
Eileen Begley
Coldwell Banker, DelMonte - Carmel, CA
Monterey Real Estate

You are right Janice, good point!  They can try to do a loan modification of course but no guarantee on that one.

Feb 15, 2009 02:54 PM
Sasha Miletic - Windsor Real Estate
RE/MAX Preferred Realty Ltd. - Windsor, ON

Hi Janice, Welcome to AR, Be a Blogholic and start writing your own blog soon on AR. All the best for your RE business. This is the right place for customers, friends, realtionships etc.

Best - Sash

Feb 15, 2009 07:29 PM
Yvette Gardner
Keller Williams Realty, Spartanburg, SC - Spartanburg, SC

Welcome to the Active Rain community. This is a great site with lots of information.  Have fun with it and hope to see more of your blogs soon!  We have a team of three outstanding full time agents to assist your buyers and sellers in Spartanburg/Greenville, SC.  Let us know if we can ever help. Again, welcome to AR!!

Feb 15, 2009 11:22 PM
Morris Childs
PEP source - Spartanburg, SC

Welcome to Active Rain. It just gets easier after your first blog. Just write about what interests you.

Feb 16, 2009 02:46 PM
David Painter
Keller Williams Realty - Spartanburg, SC

Good to have you on Active Rain.  This is a good site for gathering information and interesting to see what others are blogging about. Contact us if we can be of service to you. We would be happy to send you a referral or to take good care of any referral you would send to us.

Feb 16, 2009 03:22 PM
Charlottesville Solutions - Charlottesville, VA

Nice post! I also wanted to welcome you to activerain, I hope you enjoy it.

Feb 21, 2009 08:11 AM