If you're looking for a 2nd mortgage, you have a very limited selection!

Jenny's a great gal. She's always been a frugal spender. Never racked up too much debt and always paid what she had on credit, on time! Never a late payment...not even once. A real A+ in the credit department.

Jenny has a Countrywide 1st Mortgage and a Flagstar 2nd Mortgage; both at a great interest rate. What she'd really like to do is refinance and take some cash-out but, she doesn't want to consolidate both mortgages (I won't argue with her).

What would really make her happy is to take out a new Home Equity Loan with Flagstar Bank...according to her they've been a stand-up lender; great customer service and all (and I certainly agree as I've had a similar experience in my dealings with Flagstar). My Account Executive at Flagstar is one of the best in the industry!

There is however one little problem. You see, as much as Jenny would like to refinance her home equity loan with Flagstar, the secondary mortgage market is a very restricted market so it's not really her place to decide what lender to finance with. Here's what Underwriting Support at Flagstar Bank had to say on the matter:

"The second mortgage market is very volitile at this point and we had eliminated second mortgages altogether for a good 6 months or so.

Since the reinstation of the program we decided that we would only offer the second mortgage product to current customers as a benefit to them, but since the market is weak for second mortgages we have not opened the option back up to all borrowers only current customers.

Thank you

Flagstar Bank
Underwriting Support Desk
underwritingsupport@flagstar.com

[My note: current customers are classified as current Flagstar 1st mortgage lien holders.]

Flagstar Bank isn't the only institution following this policy, Wells Fargo is too.

This doesn't mean that if you're looking for a Home Equity Line of Credit or a Home Equity Loan you won't get it, it simply means 2nd mortgages are in short supply and there's less room for being picky; you'll have to take what you can get!

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If you have any questions on your Home Equity Line of Credit, please contact me here.