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One couple's tale of refi rejection

October 5, 2009 |  9:52 am

If you missed David Lazarus' column on Sunday, it shows how the pendulum has swung from easy refinancing to darn-near-impossible refinancing, using the example of Glendora residents Angie Trujillo and Carl Heinzen, who applied for a refi several weeks before Trujillo was laid off from Bank of America in March and spent months satisfying the paperwork requirements:

But in August, they learned it had been rejected. The reason, according to the letter they received from the bank: "Income insufficient to support expenses."

Apparently BofA decided not to take into consideration the $58,000 severance package Trujillo received from BofA along with her pink slip.

Or her $377,000 BofA pension.

Or her $156,000 in savings at BofA.

Or the $10,000 she and her husband deposit at BofA monthly for rental properties they own and manage.

Not to mention the $450,000 value of their house, as appraised by BofA for their current BofA loan of $280,000.

Oh, and let's not overlook that Heinzen's FICO credit score was 809 at the time of their refi application and Trujillo's was 764, placing them among the least-risky loan seekers in the country.

I understand banks not wanting to loan to the unemployed -- nearly 10% of the population according to the latest U.S. figures. And just because someone has a pension and hefty personal savings doesn't mean they won't decide to strategically walk away if values decline further. But it still surprised me that even with their rental income, they were considered too risky for the refinance.

-- Lauren Beale

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