Refinancing

The lowest interest rates in years have not yet spurred consumers to run out, borrow money and spend. But there is one area where the lower rates are causing change: the refinancing of home loans. Refinancing activity is at a fever pitch as homeowners rush to trade in their old mortgages for new, cheaper ones. Since this time last year, refinancings have jumped 230%, said Richard Teach, deputy chief economist at the Mortgage Bankers Assn. of America in Washington.

A multimillion-dollar bond refinancing package that backers say is critical to Orange County's bankruptcy recovery is proving a tough sell to some county supervisors, who are skittish about extending the county's already hefty debts. The proposal, which Board of Supervisors Chairman William G. Steiner likens to "refinancing your house," will be put to a vote of the full board Tuesday.

Taking advantage of lower interest rates, the owners of the 73-story Library Tower--the tallest building on the West Coast--have completed a $200-million refinancing of the downtown Los Angeles skyscraper. The deal ranks as one of the largest single-property refinancings in several years, according to GMAC Commercial Mortgage, which teamed up with Goldman Sachs Mortgage Co. to finance the transaction.

Brazil will resume payments on its massive foreign debt only after creditor banks agree to refinance interest, the finance minister said in an interview published Sunday. "I only intend to end the moratorium when I refinance the $7.3 billion in interest due in 1987 and 1988 and cut spreads from 1.125 percent to zero," Finance Minister Luiz Carlos Bresser Pereira told the Estado de Sao Paulo newspaper.

The financial question facing millions of American homeowners right now is not: Should I refinance my mortgage? For many of them, it is: Should I refinance my refinance? According to mortgage securities industry estimates, slightly over one-half of the country's outstanding home loans carry rates of 7% or higher. One out of four loans carries a rate over 71/2%, one out of eight a rate of 8% or higher.

Transportation planners today approved an agreement with Lehman Bros. and others to evaluate whether the bond debt for the 91 Freeway toll lanes in Orange County needs to be refinanced. The action was prompted after the bond insurer for the 91 Express Lanes debt was downgraded by several credit agencies. As a result, the interest rates on the bonds have increased and are now costing the Orange County Transportation Authority, which operates the toll lanes, $30,000 a week, an OCTA official said.

Mortgage rates have been edging down for the past six months, and now some rates are at their lowest levels in years. If you are not completely satisfied with the rate and terms of your present mortgage, it might be time to consider a refinance. In some cases, refinancing a mortgage can improve cash flow, reduce income tax payments and help you save tens of thousands of dollars. But this is not for everybody.

Earle M. Jorgensen Co., a distributor of steel and other metals, said Thursday that it has refinanced its long-term debt from a 1990 leveraged buyout. In the refinancing, the company has obtained a $175-million revolving credit line and has issued $155 million in 10.75% senior notes due by 2000. The company said the transaction will improve its financial flexibility. The note offering was managed by Donaldson, Lufkin & Jenrette Securities Corp. and First Boston Corp. Kelso & Co.

Nearly 400,000 residential refinance and equity loans originated in California between January and April, a 20% drop compared to the almost 500,000 loans originated during the same period last year. Value of those loans was about $50 million, off 19% from $61 million in 1992. Figures are for January through April. Loan amounts in millions of dollars: Southern California Loan Amount County 1992 1993 %chg. Los Angeles $16,871.2 $12,815.5 -24.0% Orange 7,024.8 5,557.5 -20.9 Riverside 1,940.0 1,616.

The Federal National Mortgage Assn., the nation's largest buyer of mortgages, announced new requirements Wednesday that should make it faster and cheaper for homeowners to refinance home loans. The new rules, expected to become industry standards for refinanced fixed-rate loans, will allow many homeowners to avoid having to get new appraisals or employment and income verifications, thereby shaving as much as one or two weeks and hundreds of dollars from the refinancing process.