Outside the Box: This home mortgage disaster is ready to punish housing markets

Outside the Box: This home mortgage disaster is ready to punish housing markets

In a MarketWatch column last March, I discussed the serious threat that cash-out refinances (cash-out refis) pose for major U.S. housing markets. Eight months later, the problem continues.
To reiterate, in a cash-out refinance mortgage the borrower pulls out some of the equity in the house by taking out a new mortgage larger than the previous one. The homeowner pockets the difference and can use…

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