Cash-in refinancing
A combination of low CD and savings rates, reduced appraisal values, and higher equity required by lenders, it is becoming more popular that home equity loan borrowers are putting cash in when refinancing. This is either by choice, lender requirements, or a combination.
In reality, it is just getting back to the old custom of paying down the mortgage. Now, I don’t know which is more troubling:
1. The fact that it seemed natural for me to call “paying down the mortgage” an “OLD” custom.
2. That this practice is so revolutionary that the LA Times ran a front page story about this new phenomenon.
3. That the Chief Economist for Freddie Mac called the practice “Un-American.” (see story below)
The fact that this is newsworthy is an insight into the mindset of American consumer finances. Maybe more people will someday get back to the idea of looking forward to their mortgage burning parties.
