The borrower had good credit, wasn't pulling out cash and had never missed a payment, but his total mortgage debt exceeded 90% of the home's value at the time the loan was originated. The rejection "really kind of shocked me," Mr. Dunne says, adding that the lender's "situation was not being hurt in the least bit."
An executive vice president with the South Weymouth, Mass., lender, says he can't comment on the specific situation. "I think we are all being more careful," he says. "On the other hand, if our position isn't being worsened and the customer is able to do something to improve their situation," the bank is likely to give its approval.
Source: yahoo! finance
With foreclosures spiking, the Federal Reserve is taking steps to try to keep some distressed borrowers in their homes.
More than 236,000 homes were lost to foreclosure in California last year, topping the previous nine years combined, data released Tuesday show. And the number of borrowers who defaulted on their payments hit a record high of more than 404,000....
Whatever the reasons, mortgage refinance activity has exploded in recent weeks. Perhaps you are among the millions planning to swap your old mortgage for something better...
You can use tax and financing tricks to make the slide in house values far less depressing....
The borrower had good credit, wasn't pulling out cash and had never missed a payment, but his total mortgage debt exceeded 90% of the home's value at the time the loan was originated. The rejection "really kind of shocked me," Mr. Dunne says, adding that the lender's "situation was not being hurt in the least bit."
Approvals from home-equity lenders used to be routine, particularly if the borrower wasn't increasing the size of the mortgage as part of the transaction.
