Refinancing

A mortgage-lending bill passed unanimously by state delegates last week and expected to come before the Senate today is being decried by fair-lending advocates, who fear homeowners would be hurt by the proposed increase in fees that brokers could charge for certain refinancing loans. Mortgage brokers, who link customers with lenders, account for nearly 70 percent of the home-loan business. They charge finder's fees that are a percentage of a loan's value, up to a state maximum of 8 percent.

Several recent Sun articles demonstrate the positive power of newspapers. Just one day after a shocking Page One story of financial abuse that left a Columbia man bankrupt and his family homeless, government officials promised in another front-page article to close loopholes in Maryland's foreclosure process that allowed this outrage to occur . The first article, "Out of townhouse, but not by choice," written by Larry Carson, described how an immigrant from...

William Heckner had refinanced his Carney home once before -- back in 1995 -- to help him get out from under a burden of debt. Toss the credit cards. Make a fresh start. So what if he had to take a 10.5 percent mortgage. You do what you have to do.He had good intentions, but financial pressures began to rise again. There was his son's tuition at Calvert Hall College high school. His wife -- a nurse -- was going back to school as well and was planning on opening a practice. He didn't adjust his spending habits.

Dear Mr. Azrael:During the spring, I was sent information about refinancing [a second mortgage].[The mortgage company] told me they received a list of requirements from [my first mortgage holder].The requirement that I had to fulfill was to send in a check for $150. They needed to receive the money before the subordination agreement would be prepared. I did as instructed.In September, I received the settlement package in the mail. I noticed that lender services was charging an additional $100 for the work performed by [my first mortgage holder]

Borrowers who choose to refinance existing 30-year fixed-rate mortgages are likely to stay with a 30-year loan, according to third-quarter statistics released by Freddie Mac.The study showed that 24 percent of borrowers who originally held a 30-year mortgage decided to switch to a 15-year fixed-rate mortgage. That figure is down from 30 percent in the second quarter. The majority of homeowners -- 65 percent -- refinanced into a 30-year product.Of borrowers refinancing 15-year fixed-rate mortgages, 25 percent decided to switch to a 30-year loan, while 70 percent refinanced into a 15-year loan.

Howard County is refinancing one-quarter of its debt -- a move that officials say will save $3.43 million by locking in lower interest rates for the next several years.The refinancing of $132.7 million worth of bonds takes advantage of current low interest rates in the bond market and Howard's new triple-A bond rating -- the highest possible -- that also qualifies the county for lower rates.Dale Neubert, the county finance director, equates the move with refinancing a home mortgage. "We've just refinanced our house," she said.

Dear Mr. Azrael:I have recently purchased some investment property at 30 percent less than the market value [with a mortgage] at 10.5 percent for 30 years.I am looking at refinancing the properties at the full-market value at a lower interest rate. Would this be wise?I am thinking that I could possibly pay off the current mortgage and use the rest of the income to possibly purchase more properties.Please give me some advice.Wave TaylorBaltimoreDear Ms. Taylor:Interest rates are falling. Now is a great time for folks to consider refinancing their mortgages.

HERE ARE my three New Year's resolutions:1. Lose 10 pounds.2. Clean up my appallingly messy office.3. Do all the money stuff I've been meaning to get to for months.Speaking from long experience, I can't vouch for success with Nos. 1 and 2. But I'm a shoo-in for No. 3. Early in each year, my husband and I set aside some time to discuss money matters that we haven't attended to, and ask ourselves what we ought to be doing next.Our list will differ from yours. But here are three places you might want to look in 1998:Your mortgage.

Rates for a 30-year fixed-rate home mortgage among Baltimore-area lenders have dipped below 7 percent for the first time in more than four years, and the drop has apparently started another refinancing frenzy.According to HSH Associates, a New Jersey firm that tracks and analyzes mortgage rates, the local average 30-year mortgage rate has fallen to 6.92 percent, the lowest since rates hit 6.81 percent on Oct. 15, 1993, during the last refinancing boom.Nationally, the Freddie Mac 30-year mortgage rate survey dropped to 6.89, its lowest mark since Oct. 29, 1993.

A Potomac man pleaded guilty in U.S. District Court in Baltimore yesterday to charges of conspiring with a white-collar criminal in a scheme to defraud banks and mortgage lenders.Stephen R. Kersner, 44, a former partner with the Washington law firm Ross & Hardies, pleaded guilty to conspiring with Michael H. Clott, the mastermind of a home-refinancing scheme.According to the statement of facts presented at yesterday's hearing, Kersner forged loan documents in his parents' names and used three properties his parents then owned in New York, (( Florida and Pennsylvania as collateral.

Federal and state officials announced a coordinated campaign Monday to combat a rising tide of con artists who use mortgage-relief scams to bilk homeowners struggling to stave off foreclosure. As the housing crisis and job losses from the recession have combined to push more Americans to the precipice of foreclosure, fraudulent mortgage-relief services for homeowners have surged, Attorney General Eric Holder said, with the FBI investigating 2,100 mortgage-fraud cases - five times the number five years ago. "The unscrupulous actions of individuals and companies to exploit the misfortune of others is despicable.

I called my mortgage company last week to ask about a refinancing rate and closing costs. The electronic message said I might have to hold for an hour. I hung up. The Obama administration's gargantuan guarantees and monetary injections into the mortgage market are bearing fruit, even if the system is temporarily clogged. Now we need the same kind of action on car finance. Maryland new-car sales fell 37 percent for the first two months of this year versus the corresponding period in 2008, and 2008 sales were down from 2007.

After six months of haggling and political gamesmanship, a huge housing-relief bill is heading for final approval. Though it has hundreds of pages and dozens of separate initiatives - including revamping federal oversight of mortgage giants Fannie Mae and Freddie Mac - the centerpiece is a $300 billion "HOPE" program designed to provide refinancing lifelines to as many as 400,000 homeowners in trouble on their current loans. But what are the specifics? Who will be able to qualify for help?

For more than 13,000 Maryland homeowners whose houses are in foreclosure and 2 million more across the nation likely to face the same fate this year, a rescue package tentatively agreed to yesterday in the U.S. Senate is likely to provide only limited relief. It offers $100 million to provide counseling, bonds to fund refinancing and tax credits for purchasers of foreclosed houses and $4 billion in grants for local governments to buy foreclosed properties to protect neighborhoods. They're all useful steps, but they are unlikely to do more than ease the impact of the housing bust and allow both parties to say they are attacking the problem.

This week's Federal Reserve surprise - a sharp cut in its benchmark interest rate - helped push already sinking mortgage rates to their lowest levels in nearly five years. Such numbers led to a wave of calls from consumers looking to find out whether they'll save money by refinancing, particularly those with adjustable-rate loans that will soon reset with higher monthly payments. "It's crazy. It's like the floodgates have opened up," said Denise Shipowick, who runs 1st Primacy Mortgage Corp.

Remember trying to refinance during the real estate boom? You were lucky if your broker or lender returned your calls within two weeks. How that has changed since the bust of the subprime market last year. Traditional borrowers - meaning those with good credit, not too much debt and enough equity in the home - are in the driver's seat right now. "You can find yourself in a situation where mortgage lenders or brokers are climbing over each other" to get your business, says Frank E. Nothaft, chief economist with mortgage giant Freddie Mac. Refinancing has recently ticked up as interest rates have ticked down.

Despite the mortgage meltdown, the blizzard of advertising for home loans continues. Fewer pitches scream "Bad credit? No problem!" Instead, lenders struggling to remain profitable are targeting people with good credit and plenty of home equity. Mortgage firms that have survived the subprime shakeout are focusing on persuading homeowners to refinance. The lenders promote refinancing as a flexible tool to lower interest rates and stretch out payments. But critics say the offers often appeal to the same inclination that led many borrowers astray - the tendency of people to live beyond their means by using their home equity as an ATM. "It's all the art of distraction," said Bruce Miller, chief executive of Dailey & Associates Advertising.

Howard County expects to save $6.3 million in interest payments during the next dozen years by refinancing $104 million in nine-year-old bonds. The sale Wednesday refinanced $92 million in general county bonds and $12 million in water and sewer bonds, said Sharon Greisz, county finance director. By getting a 3.57 percent interest rate - a full one percentage point lower than the average interest on the old bonds - Greisz said the county would save $520,000 a year in interest, totaling $5.3 million in savings over the life of the general bonds, and $48,000 a year totaling $1 million in savings for the water and sewer bonds.

That adjustable-rate mortgage may have seemed ideal when you got it. Now, you're not so sure. Its low "teaser" interest kept the monthly payment affordable. Oh, sure, you knew that someday it would reset - but by that time your house's value would have risen and you'd have no trouble getting a fixed-rate loan. Or maybe you figured you'd be able to sell for a nice profit and move up. Or you'd get that big promotion or new job and easily be able to afford the higher payment. What you hadn't bargained on was the housing slump and the subprime mess.

Several recent Sun articles demonstrate the positive power of newspapers. Just one day after a shocking Page One story of financial abuse that left a Columbia man bankrupt and his family homeless, government officials promised in another front-page article to close loopholes in Maryland's foreclosure process that allowed this outrage to occur . The first article, "Out of townhouse, but not by choice," written by Larry Carson, described how an immigrant from...