Homeowners who want to refinance existing mortgages may be more likely to take advantage of the lower rates, but many people who bought during the real estate bubble won’t be able to qualify for a new loan because they have little equity or are “upside down” — owing more on their homes than they are worth.
“I anticipate it will increase refinance activity, but there will be nothing dramatic,” said Terrin Griffiths, an economist for the California Credit Union League, which represents credit unions in California and Nevada.
Jeff Lazerson, a Laguna Niguel mortgage broker, said all the customer calls he received Tuesday were from people seeking to refinance, not buy homes. Many are trying to get out of adjustable-rate mortgages scheduled to reset to higher rates next year, he said.
But most who called were rebuffed because they were upside down on their current mortgages or had credit scores too low to qualify.
“Out of all the people calling, about 30% at most can get help,” Lazerson said.