Wait a minute! I thought Jumbo mortgage loans were OK? The last few weeks in mortgage financing have been a whirlwind of change. A few weeks ago the main focus in real estate was on sub-prime loans that were associated with high risk to risky buyers, Then it was Alt-A...which really are no and low doc loans. All of a sudden they are considered risk. Within the last week or so..jumbo loans seem to be the latest victim of mortgage risk!
Now Jumbo Loans or non conforming loans over 417K are considered risk! With new guidelines for Fannie Mae and Freddie Mac coming out in September that will change and limit qualifying amounts for home buyers no matter what instrument they choose, it seems to me that the number of eligible buyers will be greatly decreased in the near future. At least in the short term it seems as if we are returning to more traditional and conforming loan underwriting with 20% down, I would love for loan officers and mortgage companies to share their thoughts on the near future of mortgage loans. All comments and insights would be greatly appreciated.
18 comments • Jim Crawford ~ Atlanta Real Estate-ABR E-PRO • August 30 2007 11:25PM
Nice post. As mortgage brokrs it is our job to find the programs and guidelines that fit these unique products. I love my job and have gotten set up with around 10 lenders in the last 2 weeks to replenish the other 10 that went out of business. What we are doing now is focusing on portfolio lenders, not reits, and banks with close ties to wall street like WAMU. Our jobs are a little more time consuming, however that is what mortgage brokers do. We BROKER out loans to lenders with a proper fit to the missing puzzle piece. It is frustrating how many lenders are changing their guidlines midstream during a loan, however you need to continue to adapt to the changes and find the lenders with the good jumbo pricing, find the lender that goes to 90% on the investment property, etc, etc, My USP is service. Bottomline, and the ability to navigate through the murk to continue to find those good products
Jim,
One of my listings just closed on Monday. It was 23% down and it was through Countrywide. I was shaking and offered the the buyers Mortgage broke a dinner if he could close on time.. on time I mean they said within 2 weeks. Well I will be posting this guys success on AR this week. He did everything he said and wanted the challenge. I haven't seen that type of deal go so smoothly in many months. So what did he do right? When he accepts my invitation to AR ..I hope he chimes in here. Oh and the home was purchased for 255,000
Brian! Thans a bunch! You mentioned one line that interested me in particular. "It is frustrating how many lenders are changing their guidelines midstream during a loan"There is one major lender(whom I will not name) that I know that keeps denying they are doing this, but it seems to be business as usual. I was outsied a closing the other day, where the lender told the buyer they need an additional 15K to do the deal. It was a total re-write of the loan terms.
Paula we are all parked for answers.
Randy thanks! Wow, I did not know they were that high!
Phelena I do hope we get some lenders responding to the post, I would really like to hear their response.
Neal thanks! We are all sweating it out. We had a closing where the original loan was with HomeBanc, that closed shop on writing loans. Then Countrywide picked it up. We closed at 4 PM one afternoon, and the next morning Countrywide was not writing, because at that time they had not secured that additional backing to keep their business open!
Kelly what a turn around. From anyone gets a loan, to everyone is now a prospective risk.
Gary thanks for stopping by! :)
I have a 620 mid-score, low DTI ratio, perfect mortgage history and good income (Full Doc). Are there any 80/20 or 100% LTV/CLTV programs for me?
Being in North Carolina I do not feel your pain, Our average Loan Size is between $175,000 and 250,000.00. There has to be a limit to a value of a home.