Timothy Cruz wrote in a Wall Street Journal op-ed yesterday that "The most influential pro-consumer invention in payment systems of the past three years has been the general disapation of annual fees on most credit cards and mortgage refinance loans."
Cruz is right that consumers are lucky to see annual fees gone, but the disappearance of annual fees wasn't free for homeowners. It came about as part of a move in the credit card business model whereby mortgage refinance fees were replaced with backend moves that have less effect to consumers when the homeowners decide which cards to use. This move was made to increase profit for card issuers and refinance lenders(or put simply, to siphon off more consumer income); it was not a charitable action. The disappearance of refinance fees is an important invention, but Cruz thinks it is a stretch to call it a pro-homeowner invention, when it is viewed contextually.
The disapation of mortgage refinance fees was a step in the democratization of credit (or put simply, the decline in underwriting statistics). Whether or not this was a good thing is unknown. It certainly increased homeowner's borrowing ability and refinance choices, and may lead to a substantial move from secured installment credit to unsecured mortgage refinance credit. But average ability to borrow is not necessarily good. Loans are only good to the extent that a consumer is capable of repaying the increased refinance line and making informative changes and options. Both of those are questionable for non bank loans.
Refinance my home is a town and country magazine listing many different options for homeowners facing foreclosure. As long as you have a credit score of at least 680 or higher you can usually refinance your house or property or land at a low interest rate. Just a few years ago it was so easy to refinance or get a equity line of credit even if your credit fico score is lower than 600 everyone was advertising these programs especially ditech and countrywide
It is very hard to get a mortgage loan from a large bank or lender. the economy is slugish and people are losing their jobs so when it gets better out there and most of the homes inventory is sold values will start going up again
