Download After two slow years, mortgage refinancing market

After two slow years, mortgage refinancing market taking off
BY MARILYN BOWDEN
With interest rates still low
and pricing more stable, mortgage refinancing is picking up
in Miami-Dade.
After very little activity in
2009-’10, the refinancing market is just taking off, said Rashmi
Airan-Pace, a partner in the realestate law firm Airan2, AiranPace & Crosa.
“Appraisals were slow,” she
said, “and there was uncertainty
as to the real market values of
the properties.
“B ut
now
banks ,
homeowners and buyers agree
on the true values of these
homes, so this is when people
will be able to refinance. The
interest rates are good, and it’s
in the best interest of the lenders to allow them to go forward; it means getting a good
loan on their books.”
It’s a cyclical process, she
said. “In 2004-’05 there was a
big refinancing boom, and then
2005-’06 were big purchase
years.”
Ms. Airan-Pace emphasized
that the people who are eligible
are largely those who bought
before the boom, whose loans
are not under water.
Nancy Stoner, an associate
in t he l a w f ir m D an ie ls ,
Kashtan et al., said she is also
seeing refinancing coming on
strong.
“People who are financially
able to refinance are doing
so,” she said, “and coming to
grips with the adjusted value
of their property. They’re also
concerned that they are getting the best interest rate and
that rates are going to start
going up.”
This contrasts strongly with
the pace of loan modifications,
sought by those who don’t have
financial stability and who are
not able to come up with the
difference between what their
house is worth and what they
need, Ms. Stoner said.
Photo by Maxine Usdan
“People who are financially able to refinance are doing so, and coming to grips with the adjusted value
of their property,” said Nancy Stoner. “They’re also concerned that they are getting the best interest rate.”
“Lenders are not proceeding cant rate,” she said, “though able to short sales, and that is
with modifications at a signifi- they are getting more amend- helping to fuel some of these
Photo by Marlene Quaroni
Even decreasing payments a few hundred dollars a month can make a difference, said Claudine Claus.
transactions.”
A slight increase in rates did
lead to a slowdown in refinancing activity over the December
holidays, said Claudine Claus,
president & CEO of Home Financing Center, but “now it’s
starting to pick up again.
“What I’m hearing is that
people who were unemployed
are now employed and qualifying again.”
She said borrowers who have
been thinking about refinancing
should do it now, because
there’s only a small window
when rates are low that it makes
sense to do so.
“It helps if they have a loan
that’s with Fannie Mae,” Ms.
Claus said. “Then the loan
amount can go up to 125% and
they can still refinance. But that
will expire in July.”
While most of the time mortgagees don’t know where their
loan originates, she said, “they
can call us and we can look it up
for them.”
The rise in refinancing has
positive implications for the
economy, Ms. Claus said, as
well as for the housing market.
“If borrowers are decreasing
their payments even by a few
hundred dollars a month,” she
said, “that can make a difference – and most are saving more
than that. They will have more
money to spend in the market,
which will help the economy in
general, and it will make their
existing homes more affordable.”
“In general,” Ms. Airan-Pace
said, “there is more stability
coming to the market in terms
of market value. The economy
is starting to see some stability,
and people are starting to buy.”
The rise in refinancing applications “signals to the lenders
and to the market at large that
there is stability at some level,”
said Ms. Stoner, “and that provides ballast for the market in
general. It makes everybody else
understand that it’s safe to buy.”