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Mortgage Market - What's happening in the Mortgage Market?

The sub-prime woes are spreading through the market

If you've been following the financial news lately, you've seen the deterioration of the mortgage market that is resulting from the recent sub-prime woes.

Here are some recent news stories for reference:

Bernanke Prepared to Cut Key Rates Again
(Realtor Magazine Online - Feb. 28, 2008)
The housing market is likely to start stabilizing later this year, the Fed chair says.
To read the full story, please click here.

Schumer calls on regulators to head off subprime spillover | MarketWatch - August 8, 2007

Fannie and Freddie: White Knights to the Rescue? | Barrons On-line - August 7, 2007
 

What's happening in the Mortgage Market? 

The non-GSE (Fannie, Freddie, FHA, VA) mortgage market is rapidly deteriorating. It is no longer just a sub-prime issue.

Liquidity is at its lowest level in years.

Lenders are facing severe liquidity and earnings challenges.

Mortage companies, hedge funds and other investors are shutting down daily.

This has caused changes in the availability of loans:

 
Stated Income / Verified Asset Programs
max 90% LTV with 660 FICO
Stated Income / Stated Assets
max 90% LTV with 680 FICO
No Income / Stated Assets
max 80% LTV with 700 FICO
Non Warrantable Condos
max 90% LTV
Condotels
max 90% LTV
Stated Income 2nds and HELOCs
temporarily suspended


Stricter underwriting guidelines now apply:

Interest-only ARMs must now qualify at the fully-indexed principal and interest payment.
Stated-income loans are being scrutinized for suitability and job history.
All appraisals are being reviewed.

Things I can do to Protect my Clients

For Home Buyers - I'll help you determine which loans programs are still working, and I'll put you in touch with a well capitalized, established mortgage banker, such as Coldwell Banker Home Loans.

For Home Sellers - I'll scrutinize "pre-approval" letters for details of financing. I'll check to see if high loan to value approvals are still valid. And, I'll use my preferred lenders as an extra check to qualify buyers working with other lenders.

Questions? - Call me so we can talk about your situation.
George Cooke (858) 674-1222

 


This page was supported with information that was provided courtesy of Jim Kubicka
Coldwell Banker Mortgage (858) 692-3330

 
 
Copyright© 2008 George Cooke. All rights reserved. The content of this site is believed to be accurate but not guaranteed.
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