Refinancing Your Home. The Home Equity Lending Industry: Refinancing Mortgages for Borrowers with Impaired Credit

This book provides the first systematic study of the home equity lending industry from a public policy perspective. Home equity lending--refinancing mortgages for homeowners whose credit ratings do not meet the normal underwriting standards of prime lenders--has grown rapidly during the past dozen years. But this form of lending is not very well known or understood outside the industry itself. "Home equity lenders take greater risks than conventional prime lenders," notes Weicher, and they incur higher rates of delinquencies and defaults, and higher servicing costs. Hence, they charge higher interest rates. But because of the risks and uncertainties involved, this form of investment is not for the faint of heart. To increase understanding of this rapidly growing industry, Weicher identifies the demographic and economic characteristics of borrowers; mortgage rates and terms compared with those on prime loans; origination and servicing costs; rates of delinquency and default; and the costs incurred by real estate owned due to foreclosure. The book provides a sound foundation for investors, public policymakers, and the general public interested in this fast-growing segment of the financial marketplace. Refinancing Your Home.

John C. Weicher is a senior fellow at the Hudson Institute, based in its Washington, D.C., office. He has served as Assistant Secretary at the U.S. Department of Housing and Urban Development and as professor of economics at Ohio State University and the University of California at Irvine. Refinancing Your Home.