OK, so I went to my bank to see about changing some things with my home equity line of credit (HELOC). The bank froze it last year when the value of the house dropped like a stone. While I was there, I asked why we were not allowed to refinance the mortgage. I had been told on numerous occassions that we could not because we were over 100% loan-to-value (LTV). Of course, this made no sense to me because the bank already had our business and would not be assuming any new risk by doing the refi.
Well, I learned today that the federal govt has regulations limiting a bank's ability to do a refi if the borrower is over 100% LTV.
Really...can someone tell me why in the HELL that would be?
Does allowing me to refi not reduce the risk? It lowers my payment, making it easier to afford, thereby making me less likely to default. Why would the govt want to make it MORE likely for me to default? Maybe because that would make it more likely that I would need a govt program to help me out later. And if I need the govt's help, I am beholden to them.
So, here's some change we can believe in: our govt will create new bailout programs to help me with my mortgage, but it WON'T allow me to bail myself out thru refinancing on my own. Oh, did I mention that I don't qualify for the govt mortgage help anyway? Yeah, hold out your hand to rescue me, then stab me in the back with the other.
Besides, if I'm allowed to do something on my own, it might make me think I'm free to do other things on my own. And we can't have that, now can we?
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