Received a call from a homeowner last week that had nearly $100k in credit card debt.  Rates for the various credit cards were all double digit (> 9.99%).

This borrower wasn't in trouble and still reported that they had relatively high credit scores although his spouse's scores were considerably higher than his.  They were just trying to do the "smart" thing and get a lower overall cost for their existing debt.

First, we looked at whether the spouse could swing the refinance on her own with just her income and credit.  With her middle credit score being higher (>740) than his it made sense.  This would allow for the best pricing especially with it being a "cash out refi".

Initially, it looked like it would work until further info was divulged.  They had a second home in Florida with no rental income.  That blew her debt-to-income (DTI) ratios well beyond acceptable.  We would need his income to make the transaction work.

Upon further investigation and almost always the restrictive parameter these days was the anticipated appraised value for the subject property.  Depending on the final appraised value we may not be able to pay off the existing first mortgage and home equity line of credit (HELOC) in addition to all of their existing credit card debt. 

With that debt being at double digits and not tax deductible I made a suggestion.  Why not see what the appraisal came in at.  There was a possibility that it would appraise high enough to cover all debt without having to use mortgage insurance (MI).  But if it didn't appraise high enough to cover all the existing debt, let's pay off the first trust and all the high interest non tax deductible credit card debt and subordinate the remaining balance on the existing HELOC.

I thought the guy would reach through the phone line to hug me.  Here was a very acceptable solution should the property not appraise high enough.  Get rid of the credit card debt and if necessary keep the low (3.25%) interest only payment of the HELOC.  It would be more work for us to get the existing HELOC subordinated but it was the best solution for the borrower.

•  The number of Americans filing claims for jobless benefits unexpectedly increased last week, indicating the improvement in the labor market will take time to unfold. 
                                                                     ~ Bloomberg

24,000 additional Americans filed for unemployment insurance last week.  "A Labor Department spokesman said the rise in claims was due more to administrative factors reflecting volatility around Easter than economic reasons."  Wasn't this the second week in a row that the claims grew "unexpectedly"?

In the week ending April 3, continuing claims rose to 73,000 to 4.64 million people.  This doesn't include the number of Americans receiving extended benefits under federal programs.

The number of people who’ve used up their traditional benefits and are now collecting emergency and extended payments rose by 162,101 to 5.97 million in the week ended March 27.

Roughly, 10+ million without a pay check.  More than half are chronically unemployed.