Second Mortgage

The state's House of Delegates recently passed by a 134-to-0 vote a bill that would make it easier for homeowners to refinance mortgages at today's low rates. The bill, modeled after a law Virginia adopted more than a decade ago, would allow homeowners to proceed with refinancing a first mortgage without permission from a second mortgagor. The process of seeking such approval can be costly, confusing and time-consuming, according to the bill's sponsors. “Too many homeowners struggle to make payments on more than one mortgage,” said Del. Sam Arora, a Montgomery County Democrat who co-sponsored the bill, HB 88. “We have a real opportunity to help them by removing an unnecessary barrier to locking in lower interest rates and stay in their homes.” For the law to apply, the principal of the second mortgage would have to be $150,000 or less.

In addition to an extension of the Homestead Tax Credit application deadline, several other pieces of legislation relevant to homeowners passed both chambers of the General Assembly during the most recent session, which ended earlier this month. Gov. Martin O'Malley is expected to sign them -- provided they pass a constitutional review, according to spokeswoman Raquel Guillory. Among the 2013 session housing legislation that is likely to become law: House Bill 235, introduced by Harford County Republican Del. Susan K. McComas, would require the Department of Assessments and Taxation to add five fields of information to the publicly available online database of property tax assessment information.

In addition to an extension of the Homestead Tax Credit application deadline, several other pieces of legislation relevant to homeowners passed both chambers of the General Assembly during the most recent session, which ended earlier this month. Gov. Martin O'Malley is expected to sign them -- provided they pass a constitutional review, according to spokeswoman Raquel Guillory. Among the 2013 session housing legislation that is likely to become law: House Bill 235, introduced by Harford County Republican Del. Susan K. McComas, would require the Department of Assessments and Taxation to add five fields of information to the publicly available online database of property tax assessment information.

The state's House of Delegates recently passed by a 134-to-0 vote a bill that would make it easier for homeowners to refinance mortgages at today's low rates. The bill, modeled after a law Virginia adopted more than a decade ago, would allow homeowners to proceed with refinancing a first mortgage without permission from a second mortgagor. The process of seeking such approval can be costly, confusing and time-consuming, according to the bill's sponsors. “Too many homeowners struggle to make payments on more than one mortgage,” said Del. Sam Arora, a Montgomery County Democrat who co-sponsored the bill, HB 88. “We have a real opportunity to help them by removing an unnecessary barrier to locking in lower interest rates and stay in their homes.” For the law to apply, the principal of the second mortgage would have to be $150,000 or less.

If the federal government really wants to help American citizens get affordable health care, why not regulate the pharmaceutical companies so that people can get the medicine they need without taking out a second mortgage? Oh, yeah -- I forgot -- that would involve lowering the income of multi-billion dollar corporations. Silly me!! Tony Seitz, Glen Burnie

Q: My husband and I are renting a house in Westminster with the option to purchase it. The owner of the house has offered to take back a second mortgage for part of the purchase price if we exercise our option and buy the house. How will this help us get a first mortgage to purchase the house?K. Houck, WestminsterA: The seller's offer to take back a second mortgage for part of the purchase price will help you get a first mortgage for the house you are now renting.Homebuyers need to borrow from 90 percent to 95 percent of the purchase price of a house in the form of a first mortgage from a lender in order to buy a home.

PARENTS AND grandparents who want to help their kids scrape together money for a home-purchase down payment now have a new, legally sanctioned way to do it: They can lend them the cash and even charge interest on it.Tucked away in Congress' massive funding bill approved in the closing hours of this year's session was a long-awaited rule change covering Federal Housing Administration (FHA) mortgage applications. Originally proposed three years ago by Rep. Bill Orton, D-Utah, the change eliminates the barriers to intrafamily down payment assistance.

An Owings Mills man was charged yesterday by federal prosecutors with mail fraud in connection with an alleged property "flipping" scheme that targeted investors and allegedly defrauded lenders. Leon Wilkowsky, 38, is expected to plead guilty to the one-count criminal information. The information alleges that over a 3 1/2 -year period ending in December, Wilkowsky, operating B&S Management Inc., conducted a fraudulent scheme to buy low-cost city properties and quickly sell them to investors.

Some readers ask whether there is any way to cancel mortgage insurance on Federal Housing Administration loans. Mortgage insurance on FHA loans does not automatically cancel even if the loan-to-value ratio has improved substantially. This is different from private mortgage insurance. With FHA loans, you must pay the monthly mortgage insurance premium as long as you own the home or keep the loan. But in the current real estate market, with rising home values and low mortgage interest rates, folks who are paying government mortgage insurance should investigate refinancing to a conventional loan which does not require mortgage insurance.

Everybody wants to help keep people in their houses and out of financial stress and foreclosure, right? That's what the Bush administration says, and that's what top executives of major banks, mortgage companies and Wall Street investors all say. But where the proverbial rubber hits the road -- at the point where individual homeowners seek to refinance or modify their mortgage terms -- things may look different. Take the case of Robert Whittaker, a Sykesville homeowner who sought to refinance a $260,000 first mortgage recently when 30-year rates fell below 6 percent.

If the federal government really wants to help American citizens get affordable health care, why not regulate the pharmaceutical companies so that people can get the medicine they need without taking out a second mortgage? Oh, yeah -- I forgot -- that would involve lowering the income of multi-billion dollar corporations. Silly me!! Tony Seitz, Glen Burnie

At 50, Fredua Agyeman has lived in Howard County for just over a decade, but until recently he could never imagine buying his own home. Last month, with a big boost from county housing programs, the county school custodian made the jump from renting in a county-owned complex to owning a three-bedroom townhouse near the Elkridge library. Two of his children live with him. Daughter Ama, 16, is a full-time student at Howard Community College who joined him at 14 from his original home in Ghana, West Africa.

Two women beset with health and financial problems were facing imminent foreclosure on their Ellicott City homes when they thought rescue was at hand. Betty J. Bullock, 63, had poor eyesight and diabetes for years and lived on about $800 a month in Social Security. She had no savings and hadn't worked since 1997. Griselda Mason, 68, also had vision problems and trouble walking, which limited her ability to work.

Everybody wants to help keep people in their houses and out of financial stress and foreclosure, right? That's what the Bush administration says, and that's what top executives of major banks, mortgage companies and Wall Street investors all say. But where the proverbial rubber hits the road -- at the point where individual homeowners seek to refinance or modify their mortgage terms -- things may look different. Take the case of Robert Whittaker, a Sykesville homeowner who sought to refinance a $260,000 first mortgage recently when 30-year rates fell below 6 percent.

If you bought a house in recent years without a big down payment or without a second mortgage, you're probably paying for private mortgage insurance every month. But you don't have to forever. You can qualify to cancel it if you've made enough payments, raised the value of your property with home improvements or (rarer and rarer nowadays) live in an area that is seeing strong gains in sales prices. One or more of those options can get your loan balance down to 80 percent of the value of the home when you got the loan, the magic number.

Like many single parents, Ashby Alexander struggles to balance the financial priorities in his life. He has helped a daughter, Brooke, 25, through college and part of graduate school and wants to do the same for his 10-year-old son, Jordan. "I'm a proud father, and their schooling is paramount to me," the 45-year-old Hampton, Va., resident wrote in a letter requesting a Money Makeover. But there are other priorities: Alexander needs to pick up the pace on his retirement savings, pay off a second mortgage and cut down on overspending.

Dear Mr. Azrael:I'd like to know if there's any way that I can purchase a house using my own home as equity without having to make any significant down payment. I presently owe about $13,000 on a $160,000 home. Thank you.Curt GlobalFallstonDear Mr. Global:Your home has substantial equity. Equity is the difference between the value of your home and the amount owed on it. Assuming you have good credit, you easily should be able to borrow 60 percent to 80 percent of the equity in your home. This borrowing power could be used to provide a down payment for purchasing a second home or investment property.

A 38-year-old Owings Mills man charged with operating a property flipping scheme that defrauded home mortgage lenders of up to $2.5 million pleaded guilty in federal court in Baltimore yesterday to mail fraud in connection with the scheme. Leon Wilkowsky pleaded guilty before U.S. District Judge J. Frederick Motz to a single count of mail fraud in connection with his 1998 purchase and quick resale of an East Baltimore rowhouse. In a statement of facts submitted to Motz yesterday, Assistant U.S. Attorney Joseph Evans said that Wilkowsky's company, B&S Management Inc., bought a house in the 1700 block of N. Patterson Park Ave. for $14,000 on Feb. 17, 1998, and sold it the next day for $53,000.

An Essex man has sued Baltimore-based Provident Bank, claiming it illegally charged him a prepayment fee when he refinanced a second mortgage last year. Andrew Bednar's suit was filed last month in Baltimore Circuit Court. The case seeks class action status, saying other customers of Provident Bank of Maryland have been similarly affected. According to the lawsuit, Bednar took out a $17,000 second mortgage from Provident in August 2003. Provident agreed to waive $681 in closing costs provided that Bednar kept the loan for three years.

AS A SELF-STYLED hipster, I was somewhat perturbed when a new trend caught me off guard this spring. Another school year is closing and students are lining up residences for the fall. I learned that my friends are purchasing homes, and I'm not. At first, I suppose I was slightly jealous. I can't afford a house. But as I thought more about it, I realized that neither could they. This piqued my economic curiosity. So I looked harder at what was going on around me. My earlier perturbation turned to concern as I listened to my friends' responses and saw new, disturbing trends emerge.