Thursday, August 25, 2011

Mortgage Refinancing Challenges Banks and Consumers

Today’s story in the Wall Street Journal — “Mortgage Refinancing Wave Poses Challenge for Banks” — highlights another obstacle for consumers who want to take advantage of record low mortgage interest rates.

Al Yoon writes:

“The capacity of banks to handle refinancings is a key issue for investors in mortgage-backed securities, whose returns are now among the most sensitive-ever to refinancings. The higher the hurdles for consumers, the better for investors who want to avoid the early repayment of principal at face value that produces a loss to bonds priced well-above that level.”

Just last week NeighborWorks America pointed out three additional obstacles that consumers who are interested in refinancing their mortgages are currently facing: a much higher credit score is needed to qualify, lost home equity in the foreclosure crisis, and cash needed for closing costs.

If you are interested in refinancing and would like to find out whether you could qualify, visit any of the more than 100 NeighborWorks HomeOwnership Centers located across the country.