Refinancing

Two new initiatives from President Obama to address the foreclosure crisis — more help for struggling homeowners and aggressive investigations of financial firms — face significant hurdles as the nation's real estate troubles linger in a volatile election year. A new refinancing plan that expands on an existing initiative would allow homeowners who are current on their mortgage payments to retool their loans and save as much as $3,000 a year on payments. This expansion would be paid for by a new tax on large banks that Obama originally proposed in 2010 that has gone nowhere in Congress — and is unlikely to be approved by Republicans facing reelection in the fall.

By using his State of the Union speech to draw sharp contrasts with Republicans on such high-profile issues as taxes and the housing market, President Obama opened an election-year debate on the role of government that could be more intense than any in decades. Warning Congress that "I intend to fight obstruction with action," he painted a confrontational picture that stands in sharp contrast with the conciliatory approach taken by the last Democrat to seek a second term, Bill Clinton.

Dear Liz: I have an adjustable-rate mortgage that is currently at 3.125%. I'd like to fix the rate, but no one will even discuss it with me because my house has been appraised at less than $100,000 and the balance of the mortgage is $144,319. I have never been late, and my credit scores are above 800. What can I do? I don't want a mortgage modification. I just want a fixed rate. Answer: If your loan was backed by Fannie Mae or Freddie Mac, and if it was originated before June 1, 2009, you may be in luck, thanks to recent improvements to the federal government's Home Affordable Refinance Program, or HARP.

The Obama administration has stepped up efforts to help homeowners refinance their mortgages, potentially bringing relief to millions of those who owe more than their homes are worth. It's an overdue step that should boost consumer spending, even if it may not avert a huge number of foreclosures. The latter problem requires more aggressive and effective loan modifications, which banks and investors have been reluctant to do — to their own detriment. The collapse of the housing market has left an estimated 11 million Americans owing more on their mortgages than their homes are worth.

The Obama administration, worried that the housing crisis is strangling the economic recovery, is stepping up efforts to aid the battered market as another wave of home foreclosures threatens to drive values down further and rattle consumer confidence again. But the administration's piecemeal approach — giving temporary reprieves to the jobless, converting empty homes into rental properties, allowing more people to refinance mortgages — isn't going to help much, said industry leaders and even some lawmakers in the president's own party.

Is a little-publicized switch in federal mortgage policy causing huge problems for condominium sellers, buyers and homeowner association boards across the country — even depressing prices and blocking refinancings? Individual owners and realty agents are emphatic that the answer is yes. They say a series of rule revisions by the Federal Housing Administration has caused thousands of common-interest developments to become ineligible for FHA mortgages. This has abruptly shut off loan money for would-be buyers and refinancers, forcing them to pursue conventional bank loans requiring much higher down payments — sometimes 20% or higher versus the FHA's 3.5% minimum — that they often cannot afford.

A proposal to allow some creditworthy homeowners to refinance underwater mortgages has become part of settlement talks between government officials and major banks over botched foreclosure paperwork. California would be a major beneficiary of such a plan because it leads the nation with 2.1 million mortgages in which the homeowner owes more than the value of the home, according to Santa Ana industry research firm CoreLogic Inc. The proposal has been floated in hopes of luring state Atty.

Dear Liz: I'm 64 and have a master's degree in education but can't find a job. Is it too late to go back to school? I was thinking of majoring in occupational therapy. Answer: It's never too late to go back to school — but it is possible to spend too much doing so. The good news is that occupational therapy is a fast-growing field with many job opportunities. The bad news is that you typically need a master's degree to be an occupational therapist, and master's programs (as you know)

Dear Liz: I was recently solicited by a credit card company. I didn't need another credit card, but this offered airlines miles that I collect, so I applied. They didn't approve the application because: "You have filed for bankruptcy and your previous account(s) with us was included in that filing. This includes any of your accounts issued by (us) such as Visa, MasterCard, store cards or gas cards. " Liz, the bankruptcy was 12 years ago, and I am very well financially situated now. I thought there was an expiration date on bankruptcies appearing on your credit report.

Like many homeowners, Immanuel Spira decided to take advantage of record low interest rates by refinancing his Westwood home more than once over the last year. Spira, 47, an entertainment-industry lawyer, thought he had a sweet deal when he refinanced into a loan under 5% last summer. But he's now doing it again to secure a rate below 4%, which he figures could save him about $600 a month. Spira's willing to again pay the roughly $1,000 lender fee for a refi, as well as the $500 appraisal fee and the almost $600 escrow fee. What gets him, though, is having to pay more than $1,000 for title insurance — that is, a fee for a record check to ensure that his property is still his. "It's ridiculous," Spira said.