Industry News

Trouble brewing in wake of home refinance boom

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In the wake of the mortgage-refinancing boom of the last few years, Americans own less of their homes today than they did in the 1970s and early '80s, according to a new report released by Demos, a nonpartisan public policy organization based in New York. The report, "A House of Cards: Refinancing The American Dream," found that between 1973 and 2004, homeowner's equity fell from 68.3 percent to 55 percent. That's because millions of homeowners have refinanced their homes in the last three years to pay off credit card debt and cover basic living expenses, according to Javier Silva, author of the report. "If home values bust, many of these homeowners will be devastated," he said. The report, based on analysis of government and industry data as well as academic research, provides a comprehensive analysis of the causes and impact of the mortgage-refinancing boom in the United States since 2001. As mortgage interest rates fell to record levels during the refinance boom, many America...