VAR’s Jay DeBoer on why the re-fi tax should be eliminated

VAR’s Jay DeBoer, Vice President of Law and Policy, tells Virginia Realtors® and homeowners why the recordation tax on re-fis should be eliminated:

First, it has become extraordinarily difficult to determine who actually owns your mortgage. The days are mostly gone of the friendly neighborhood bank making a loan and holding the note for 30 years. Lending institutions sell notes freely, transferring them electronically and sometimes the original lender continues to collect the payments as a “servicer.” When the homeowner is asked whether he is “refinancing with the same lender,” the honest answer is usually “I don’t know.”

Second, mortgage interest rates are extremely low right now, and those who have older loans with higher interest rates would generally save money by refinancing. But lenders have become far more restrictive in approving loans. Having an extra $700 to $1,000 on hand, saved from not having to pay recordation taxes a second time, might mean the difference between a loan refinance approval for a homeowner who is struggling, and a rejection.

Read the full piece at the Richmond Times Dispatch. Members should be familiar with this issue and urge their clients to respond to any calls to action from the Virginia Homeowners Alliance.

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One Response to VAR’s Jay DeBoer on why the re-fi tax should be eliminated

  1. A common complain I hear from people looking to refinance is that they no longer know who owns their mortgage. Freddie and Fannie have purchased and resold their loan so many times that tracking down the current owner becomes a huge hassle. By the time it’s tracked down, it might be so late in the process that the only options left are short sale or foreclosure, neither of which is attractive to someone who is trying desperately to save their home.

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