That doesn't surprise me at all," said Rourke O'Brien, president of State Street Mortgage, a Bellevue-based loan brokerage. "The refinance boom has lasted longer than anybody anticipated. We're looking at it as pennies from heaven. A lot of lenders are saying, `Why give anybody a break when people who will pay full freight are still knocking down your door?' It's crazy."

It's also terribly shortsighted.

Darrell Devine, former president of the Seattle Mortgage Bankers Association, said "Some of these lenders are new and simply content with the way things are. But it will come back to bite them . . . If a lender is being hard-headed, by all means go someplace else. You are doing them a favor to even inform them of your intentions. If they don't respond, who would want to continue doing business with them?"

Most loans sold

Most lenders originate and then sell mortgage loans into the secondary market. When the loan is sold, the lender no longer owns the asset. So when a customer comes in to refinance, the lender must write a new loan according to the standards of the secondary market. Those standards dictate what the lender must do. In many cases that means repeating steps that have already been done - usually a new appraisal, credit report and title-insurance policy.

Any break that can be passed on to the consumer would be in the origination fee, a term that has become synonymous with the word "points." (One point equals 1 percent of the loan amount.)

The one lender who responded, and subsequently telephoned in response to the letter I included with my mortgage payment, offered me a loan package that was higher than what I could find elsewhere. But there was an incentive - a half-percentage point reduction in fee because I was an existing customer. An additional half-percentage point reduction because the loan-to-value ratio was less than 50 percent. (I wanted to borrow less than 50 percent of the value of my home.)

The five other lenders didn't seem to care if we took our business elsewhere.

Late response

"What we are starting to see is lenders responding only when we request a payoff amount of the loan," said O'Brien. Not until the lender sees the customer is serious about refinancing, and the new lender has contacted that lender for the payoff figure, will they even respond.

"The old lender will then contact the borrower to see if they can salvage a deal," he said. "It's often too late because the borrower has paid some fees - and typically feels better working with - the new lender."

Speak up

What is your experience? Has your present lender been indifferent to your desire to refinance? Or, have you found a desire to keep your business? Write to me at the address below and I'll use some of your concerns and stories in this column.

Tom Kelly is a private real-estate consultant. His column runs Sundays in the Home/Real Estate section. Send questions and comment to: Tom Kelly, P.O. Box 70, Seattle, WA 98111