Industry NewsMortgage

Real estate lending law causes refi jitters

Future-Proof: Navigate Threats, Seize Opportunities at ICNY 2018 | Jan 22-26 at the Marriott Marquis, Times Square, New York

A Massachusetts law that went into effect last week has some lenders worried about refinancing home loans in the state. The law prohibits lenders from refinancing mortgages that are less than five years old unless they determine the new loan is in the "borrower's interest." But observers say the law is vague and makes it difficult for lenders to determine what the "borrower's interest" means. "A couple of lenders said we're not doing refis in Massachusetts because of this," said Nanci Weissgold, partner with Kirkpatrick & Lockhart, a Washington, D.C., law firm that focuses on mortgage banking and consumer finance. Whether lenders actually pull out of the state remains to be seen. Weissgold couldn't name specific lenders who threatened to halt their refi business in the state, but said the law remains a genuine concern for many despite a new regulation designed to clear up confusion. The emergency regulation, valid for 90 days, exempts some refis from the borrower's interest deter...