Roadblock to Mortgage Refinancing

Lenders are still wary of heavily indebted homeowners
Photograph by Kirk Crippens for Bloomberg Businessweek

Independent filmmaker De Veau Dunn tried to refinance his mortgage last summer to reduce his 6 percent interest rate. He didn’t qualify because he owed more than his home was worth. This spring, Dunn, who lives near San Diego, could proceed thanks to new rules in a federal program to help borrowers like him. He just closed on a new loan at 4 percent, saving $700 a month. “Seven hundred a month times 30 years—that’s a bit of a savings,” he says.

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