Refi, refi, refi -- Was ‘push marketing’ to blame?

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For many homeowners in a bind, refinancing is both the problem and the solution. Too many people refinanced otherwise affordable mortgages, refinancing again and again until their mortgages became unaffordable. Now they’re stuck because they can’t refinance again. Solution? Congress would like to help them refinance.

The L.A. Times’ Maura Reynolds explores the refi trap, focusing on the Miller family of Altoona, Pa. (pictured): ‘Vicki Miller bought her childhood home in Altoona, Pa., from her mother’s estate for $32,000, using a nice, traditional mortgage from the local savings and loan. Seven years later, her debt has more than doubled, her once-significant equity has shrunk to zero and she’s behind on her payments. The lender has begun to threaten foreclosure.’

What went wrong? ‘Miller said she was persuaded to refinance her mortgage twice into sub-prime loans she didn’t really understand, along with taking out a second mortgage. As such, she reflects what experts say is the true face of the sub-prime mortgage debacle.’

Story quotes Elizabeth Renuart, a housing attorney with the National Consumers Law Center: ‘It was push marketing,’ Renuart said. ‘As the engine revved up from Wall Street to invest in these things, the pressure was on the brokers to make these loans.’

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com
Photo Credit: The Miller family, via L.A. Times.