Home refinancing has yet to see the historic numbers to match the historically low interest rates. While refinance activity increased this summer and fall, many homeowners find it hard to get new loans."The rates have never been this low in the 30 years I've been in this business," said Pete Phillippe, a loan officer with Princeton Capital in Santa Rosa. "But it has never been harder for people to qualify for those rates."For many, the biggest obstacle is a lack of equity after homes plummeted in value during the past four years. But mortgage brokers said homeowners also face tougher rules regarding credit history and their ability to show they have the income to pay off a loan.Self-employed workers who take loads of deductions can find themselves unable to prove they have the required income for a new loan. It doesn't matter that they faithfully have paid a higher amount on the old loan than they would on the new one, said Marty McCormick, owner of the Santa Rosa mortgage brokerage McCormick and Co.McCormick said he even has had people turned down who had enough cash in the bank to completely pay off the new loan.The refinance market picked up this summer when 30-year fixed-rate mortgates dropped below 4.5 percent, but demand was nowhere near record levels."Though we are currently experiencing a mini refinance boom, the refinance levels are only at half the level they were back in the refinance boom of 2003," said Carolyn Kemp, a spokeswoman with the Mortgage Bankers Association in Washington.In July, Sonoma County homeowners refinanced 544 first-mortgage loans, according to MDA DataQuick of San Diego. It was the largest monthly total this year and the second-largest since July 2009, when an earlier round of refinancing was subsiding. The latest uptick in activity comes two years after a financial crisis caused, in part, by easy credit to borrowers, especially homebuyers. Since the crisis, the credit rules have become stricter.Earlier this decade, Santa Rosa mortgage broker John LeCave said he could talk to 10 prospective clients and find seven who qualified for money-saving refinance loans.Today, seven of every 10 who visit him at Fountain Grove Mortgage could still save money by refinancing, "but only three of them can qualify," he said.Not all lenders complain of such experiences. But many agree that the new rules require more work. Lenders now must "document their files to the Nth degree," said California Mortgage Bankers Association Chairman Steve Hops.Those seeking to refinance "have to produce a lot of paper to prove what they're telling us," said Hops, a senior vice president with Guild Mortgage Company in San Diego. That includes recent pay stubs, tax returns and bank statements.Those who succeed say it was worth it.Joan Maxwell said she already had a 30-year loan fixed at 5.875 percent, a rate that homeowners happily would have accepted during much of the past three decades."But when interest rates started going to the low fours, I thought, 'This is never going to get this low again,' " said Maxwell, a winery accountant who lives in a three-bedroom, three-bath home in Santa Rosa.She and her husband, Randy, recently signed papers on a 30-year, $270,000 loan with a fixed interest rate of 4.375 percent. They intend to use the $350 a month savings to pay down their principal in as few as 15 years.The low rates come at a time when the mortgage industry has undergone a major consolidation.At the end of 2005, California had 5,400 mortgage banking branches owned by 416 companies, according to the state Department of Corporations. By December 2009 that number had been cut in half, to fewer than 2,600 branches owned by 310 companies.Lending institutions like Countrywide, Wachovia and Washington Mutual have been purchased or absorbed, leaving a few major banks at the forefront of the mortgage industry. In Sonoma County, Bank of America, Chase and Wells Fargo now make about 30 percent of all home loans, but Santa Rosa-based Redwood Credit Union also stands among the top five here, as does Santa Ana-based Stearns Lending.Michael Conway, Redwood's senior vice president for lending services, said the three large banks may be major players nationally, but "in our marketplace, we can compete with them. And I think people recognize that."Most don't predict a jump in refinancing business in the near future."The available pool of candidates is smaller," said Norm Valmassoi of First Priority Financial in Petaluma, who helped the Maxwells get their loan.Brokers point out that many homeowners already refinanced within the last two years at relatively low rates. For many of them, it doesn't make sense to get a new loan.An exception to that rule is Windsor homeowner Tim Imsdahl, who has refinanced four or five times since he purchased his three-bedroom, two-bath home in 2000.Most recently, Imsdahl refinanced the home with Redwood, trading in a year-old 30-year loan at 4.875 percent for a 15-year loan with a rate of 3.75 percent.Even though his payments are higher, Imsdahl said he calculates he will save more than $160,000 over the life of the loan.The natural foods company sales manager said the latest refinancing may be his last."I don't think I'm going to beat 3.75," he said. "That's incredible. I still can't believe it."
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