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By Jay Romano The New York Times, October 3, 2006 - Q. Is it ever possible to get a lower rate on my mortgage without having to go through a mortgage refinancing? A. Michael Moskowitz, president of Equity Now, a Manhattan mortgage lender, (www.equitynow.com) said that it is possible, but not likely, for a borrower to renegotiate the interest rate on an existing mortgage without taking out a new mortgage. Mr. Moskowitz explained that whether or not the terms of a mortgage can be renegotiated will depend on whether the original lender still holds the mortgage. Most mortgages, he said, are sold onto what is known as the "secondary market" after the loan is made. And while the borrower may still be making payments to the original lender - who may or may not continue to "service" the loan - the mortgage itself will likely have been sold to Fannie Mae or Freddie Mac or bundled together with other mortgages (or "securitized") and sold to institutional investors. At the same time, Mr. Moskowitz said, it is possible that the original lender still holds the mortgage. "This happens most often with adjustable-rate mortgages," he said. Generally, Mr. Moskowitz said, the lender is not likely to offer the very lowest rate available, since it knows that the only other option the borrower has is to incur the costs of refinancing the mortgage. Moreover, he said, since the loan amount cannot be increased, the borrower is not going to be able to walk away from the modification with any additional cash. Other recent news |
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