August 17th, 2007 9:24 AM by Lehel Szucs
This communication is not to alarm you but to alert you to drastic changes currently taking place in the mortgage lending market. If you or anyone else you know will need mortgage financing in the next 18 months, you need to read this!
According to Federal Reserve Chairman, Ben Bernanke, "Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing." With over 100 national lenders having now closed shop in the last eight months, the mortgage credit market is experiencing unprecedented turmoil leaving tens of thousands of borrowers without financing options we once had.
What does this mean to consumers? Potential borrowers cannot wait any longer. For those who are considering buying or refinancing a home, the decreases in home values and fewer loan options, are causing many option to dissapear.
Borrowers with applications in process must not delay. Applicants should work with their mortgage professional to complete all paperwork quickly, especially on non-conforming, stated-income, and stated-asset loans. Even minor delays can result in funds being yanked at the closing table! Sellers can no longer be reluctant to accept offers or reduce prices. Tightening credit and diminishing mortgage products will continue to reduce the pool of qualified buyers. This, along with the increase in national housing inventories, means now is not the time to hold out for the "best" price possible.
If market conditions change, buyers who qualify for a loan today may not qualify a few weeks from now for the same exact loan. Just this week, many lenders have stopped offering No-Doc loans, and some lenders have even pulled back on all forms of stated loans. As market conditions continue to change, a buyer's pre-approval status can disappear even more quickly, delaying or spoiling the deal. Subprime and Alt-A refi candidates, especially those with ARMs scheduled to reset over the next 12 months, need to act now - even those with a pre-payment penalty. ARMs borrowers struggling with monthly payments now might be shocked to know that monthly payments can double in some cases once an ARM resets.
What does this mean to you? Call or email us and we can help you decide your best options.
Office: (626) 339-0697