Thinking about refinancing? A second lien may be a factor in whether or not you can.

If you've taken out a second lien on your home, it is subordinate to your primary mortgage and must be dealt with. It can't be ignored, and it doesn't matter whether it's a home equity line of credit, a home equity installment loan or any other kind of loan.

"You have one of two options" when dealing with subordinate financing on your house, says Scott Stein, president of Xetus, a technology company that helps mortgage originators manage second liens. "You either need to pay off that second, or you need to get the lien-holder of that second to agree to remain in a subordinate position to the new first."

Back in the days when home values were "always" going up, borrowers would use the cash they received on top of their new first mortgage to pay off the second.

"It was no big deal," says Stein. But since the housing crash, "people haven't had nearly (enough) equity in their homes to do that. ... So they have, more and more, chosen the path of going to the second lender and getting him to agree to remain" in the second position.

Getting the second lender to agree can be tricky, though, Stein warns.

"At some financial institutions, the answer has been, 'No, we won't do subordinations.' They won't approve a request," he says.

Others "will not decline, nor will they approve you. Or they might say they will approve, but reduce the line amount."

If second-lien holders are willing to consider maintaining the second's subordination with a new first mortgage holder, they will be looking at the risk of being in a secondary position if you should fail to make your payments. That means if you default, the second lender won't receive any money until the first lender is paid in full.

And recently, says Stein, that's something that banks have "taken a much closer look at."

One factor is whether you are taking any cash out of the deal, a situation lenders now look at with reluctance. Another is the loan-to-value ratio of not just your new first mortgage, but of the new first and the second taken together.

Stein says the best bet for refinancers is to have cash on hand or in reserve. "The more you can bring to the table on the refinance, the better your ratios are going to look," he says.

Some borrowers, either honestly or dishonestly, do not think to mention the fact that they have a second lien when they try to refinance. But it will not be overlooked, because the second lender almost always takes a hard look at your credit record, liabilities and the title to or liens on the property.

"It's always best to mention it upfront," Stein says. "It's going to come up."

It is not your responsibility to contact the second-lien holder when you start the refinance process. That's the primary lender's job. But it is to your advantage to understand the process and the thinking involved.

While banks may be cautious when it comes to changes that could affect their risk, they also often have an interest in retaining current customers. That could work to your benefit, particularly now that there has been a run-up in mortgage rates and new loans are in shorter supply.

Some banks are so concerned about this they have been using systems like Xetus, which processes second-lien subordination requests. The program looks for second liens and identifies the owner or lender. If the primary lender also holds the second, the system alerts the bank's call center to contact the borrower in an effort to retain the loan.

Banks "are more likely to approve subordination if they hold the first lien," according to Stein. But if not, they may offer you a sweeter deal on a new first mortgage in order to keep your business.

Don't expect your bank to take the first step, though. If you want to make sure you will be offered the best terms possible, you should be proactive.

Banks today are "after wallet share," Stein says. "So it never hurts to check multiple sources for loans. It's so easy to do that online for potentially a significant amount of savings over the life of the loan."

With interest rates slowly on the rise, that means bad news for homebuyers and good new for renters, right? After all, aren't the single-family and multi-family markets countercyclical?

In the words of the old song, it ain't necessarily so. Here's why:

The number of renters increased by more than 1.1 million during the 2011-12 period. That marked the eighth straight year of expansion, according to a Harvard study, which finds that there is currently an "unprecedented strength of rental demand."

For those of you who took Economics 101, the trend is clear: An increase in demand means an increase in prices -- or in this case, rents -- no matter what is happening on the buying side.

According to the Census Bureau's Housing Vacancy Study, the median asking rent for vacant units last year was at an all-time record of $720 per month. And MPF Research found similar strength in the country's metropolitan statistical areas (MSAs).

If you are a renter in Las Vegas, Albuquerque, Tucson or Greensboro, your rents went down last year. But if you rent in any of the other 89 MSAs tracked by MPF Research, your rent went up. Significantly, in some places.

Living the good life in Honolulu cost renters a hefty 8.5 percent more last year. And Bay Area cities like San Francisco (up 8 percent) and San Jose (an increase of 7.7 percent) weren't far behind.

Vacancies have come down sharply the last couple of years, according to the Harvard Joint Center for Housing Studies' latest "State of the Nation's Housing" report. Last year's vacancy rate was 8.7 percent, down from 10.6 percent in 2009. Econ 101 applies here as well: fewer vacancies, more demand, higher rents.

Larger apartment properties showed the biggest drop in vacancy, to just 4.9 percent in 2012 for professionally managed buildings with five or more units, according to the report.

Someone must be benefiting from this current rental market, and if it's not renters, a good guess is owners. The report cites a study by the National Council of Real Estate Investment Fiduciaries that shows institutional owners saw a nice 6.1-percent increase in revenues for 2012. That's below 2011's 10.4-percent increase but "still above the historical average and marking a significant improvement from the losses in 2009-10," the report said.

Delinquency rates are also down for apartment loans made by banks and thrifts, those held by Fannie Mae and Freddie Mac, and those packaged into commercial mortgage-backed securities.

The annual Harvard report notes that last year was a very strong year for multi-family loans. The number of loans to builders, owners and investors was up 36 percent, according to the Mortgage Bankers Association. The fourth quarter was even better, at an increase of 49 percent. The total amount of multi-family debt also grew, but much more modestly, at 2 percent.

The so-called mortgage secondary market agencies -- Fannie Mae, Freddie Mac and Ginnie Mae, which help increase the amount of lending money by buying mortgages from primary lenders -- remain the big players in the multi-family lending market. Their outstanding debt went up by $24 billion last year.

"Still, other institutional sources of financing began to step up, with banks and thrifts increasing their multi-family loans by $11 billion," the report notes, with insurers and pension funds also stepping up their holdings.

The Federal Housing Authority is becoming a multi-family powerhouse as well, the report details. The FHA, the originations arm of the loans Ginnie Mae purchases, "moved from an annual level of new commitments of just over $2 billion in fiscal 2008 to $14.6 billion in fiscal 2012. In terms of the number of rental units financed, this jump translates into an increase from 48,000 in 2008 to more than 200,000 in 2012."

With lenders emptying their pocketbooks for apartment developers, new construction added some 186,000 new rental units to the mix. But that brings with it another layer of affordability issues, because the vast majority of new properties are in the higher-priced categories.

"The typical new unsubsidized apartment completed in the third quarter of 2012 had an asking rent of $1,185," Harvard points out. "To afford such a unit at the '30 percent of income' standard, a potential renter would need an annual income of more than $47,000."

At the same time, though, low- and moderate-income renters benefit: If higher-income renters move up into newer units, their former apartments open up.

An especially important facet of new apartment construction is the Low Income Housing Tax Credit. A federal program administered by state housing finance agencies, the program provides tax credits to investors that provide equity in multi-family properties.

Another important supply-side factor is the "REO to rental" movement, in which formerly owner-occupied single-family units are converted into rentals. Renters now occupy one in every six single-family homes, the Harvard report says.

Despite all the new activity, the report is not optimistic that rents will recede in the coming years. "Vacancy rates continue to edge down and rental rates are moving up," it says, "providing no suggestion that supply has begun to outstrip demand."

When the going gets tough in the mortgage business, the tough starting laying off loan officers, underwriters, processors and any other workers whose jobs are tied to the origination function.

And now, with growing fears in the residential finance industry that declining applications -- driven by a weakening market for refinancings -- are once again taking their toll, several banks and mortgage brokerage firms are contemplating cutting production staff. Others are already handing out pink slips.

Industry executives are already seeing resumes from workers at CashCall, a Top 30-ranked lender that has feasted on the refi market by advertising on national television. Paul Reddam, CashCall's founder and president, could not be reached for comment. But industry scuttlebutt says the non-bank telesales lender has plans to cut at least 200 workers.

Bill Dallas of Skyline Home Loans has seen only a small decline in applications at his firm. But the company may be one of the fortunate ones. "Some shops are seeing their pipelines fall 35 to 40 percent from their peaks," Dallas said.

Lender layoffs may be good new for borrowers, though. Paradoxically, it could mean better service. And it also could mean better deals.

As refinancings -- the low-hanging fruit of the mortgage business -- begin to dry up, lenders will become more desperate for customers. And that means many will start bending over backwards to attract new borrowers.

Don't expect to see them cut rates, but they could offer price breaks on application, origination and other fees. The higher rates go, the more likely lenders will be offering bargains.

"Right now, everyone is looking at the best way to right-size their operations," said Dave Lykken, managing partner at Mortgage Banking Solutions.

Lykken, whose firm advises mortgage lenders on mergers and acquisitions, said that too many companies are "over-confident in how they will handle" the mortgage downturn.

Besides trimming back on their fees, some lenders -- in particular, banks that hold mortgages on their balance sheets instead of selling them to mortgage giants Fannie Mae and Freddie Mac -- may start loosening their loan terms.

Ever since the housing bust of 2008, loan terms have been ultra-tight, with lenders requiring higher down payments and loftier credit scores. But the last time refinancings slowed down, lenders began holding their loans rather than selling them. And the result was less-strict underwriting.

There already are signs that loan terms are loosening at some shops. Some lenders such as Navy Federal Credit Union in Vienna, Va., have been originating no-down-payment loans, but only for select customers.

Navy Federal's product is called "HomeBuyers Choice" and though it was introduced in February 2010, interest in the loan didn't pick up until this spring. So far this year, the loan has accounted for 14 percent of the credit union's applications. It accounted for only 10 percent of the institution's applications in all of 2010. (Navy Federal declined to provide any data on how many loans it actually closed.)

Katie Miller, vice president of mortgage products at Navy Federal, noted that the loan, which it keeps in its portfolio, "is very popular right now" and that real estate agents, in particular, are showing a strong interest in it.

Even though talk of layoffs in the lending business is on everyone's lips, the latest government figures show that mortgage hiring was almost flat in May compared to April.

According to the Bureau of Labor Statistics, 213,500 full-timers were employed in May in "real estate credit," which covers mortgage banking. That represents a 7-percent increase from a year ago but a loss of 1,600 jobs from March.

The latest mortgage job totals lag the national numbers by one month and seem slightly dated, given the fast pace of the drop in applications. In residential finance, declines in applications can be violently quick.

In the mortgage servicing sector, the employment situation appears to be more stable because there are still plenty of delinquent loans out there that require "high touch" from servicers trying to collect money.

For servicing employees, the biggest fear is that their employer will shift the workforce to a cheap offshore platform.

Still, mortgage companies are continuing to hire loan officers, but only if they have solid ties to their local real estate and home builder communities.

One East Coast-based production chief said he continues to travel around the country interviewing potential loan officers. But he also said that he's alarmed at some of the salaries being offered now, especially to underwriters.

Requesting anonymity, this executive said one of his top underwriters is making $110,000 per year. But one of the country's largest mortgage lending operations just made him an offer of $160,000.