How many of the ARMs and Alt-A’s have refinanced their homes at lower rates already?

Not many due to how they were structured. There are many that not only didn’t have high interest but didn’t pay principle either. They were added to the loan amount and when they reset, even a zero interest rate would be too high.

One lady (77) had a loan with a payment of $98 on an over $300,000 loan but, now due to the additions to the loan, will jump to $3,500 a month payment.

Others have lost jobs or income that make refinancing impossible. Their HELOC, car, boat, and credit card debt is just too high for any refi to help them keep their home from what I am reading.

Even the government refi program has not had good response or success. Banks are still holding millions of homes off the foreclosure process to keep them out of unsold inventories and off their balance sheets.

If the banks refi, they need to write down the loss and they can’t because they are already too low. That is one reason many banks aren’t lending. They have too many write downs ahead and not enough reserves.

In short, my understanding is not many have refinanced.

- JanPaul

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