For those of you in the lending market, let’s hope that today is the start of a better week than last week….to set us in the mood. I received this from the VP to day to set the stage for the week ahead.
“Very Important- Guideline Changes Effective August 8, 2007
· All borrowers must have one blue eye and one brown eye to qualify.
· LTV > 65% SIVA requires minimum credit score of 849.
· For all LTV > 65%, 360 months of payment reserves now required.
· Borrower’s must have no previous bankruptcies in their family history going back
three generations.
· A minimum of 25 years self-employment history now required for all NIV Programs
(at same location).
· Minimum Credit Score for Subprime Loans raised to 720.
· All non-arm’s length transaction borrowers (mortgage, real estate professionals,
family members) will be required to provide full-documentation, subject to
criminal background checks, wire tapping, strip-searches, and a minimum of 12
hours of interrogation by the Department of Homeland Security.
Please note that these changes will go into effect within the next five minutes. So please
lock you existing loan immediately. All existing loans in your pipeline must fund by noon
tomorrow.
We apologize for the inconvenience. We realize these are tough times in the mortgage
industry for all of us. Be assured that we have a commitment to remaining strong and
weathering out the storm. We ask for your understanding and cooperation.”
On a more serious note:
MBA reports some good news and some not so good news…the not so good…
Commercial Hit Expected Next
Globe and Mail (CAN) (08/13/07); Jonas, Ilaina
Problems in the U.S. residential mortgage sector have impacted the credit market; and the turmoil may wind its way into apartment, office, industrial and shopping center properties–which are likely to draw smaller deals as a result. Sales prices will fall, says Robert Horowitz, a financing arranger for Cooper-Horowitz in New York, adding that commercial mortgage interest rates already have risen half a percentage point. Commercial mortgage lenders are asking higher interest rates and financing lower portions of the purchase price, even though vacancies are down and rental rates are up for property owners. Buyers had an opportunity to borrow up to 95 percent of a purchase in recent years due to the demand for property and cheap money.
but some good…
Homeowners Are Still ‘Cashing Out’ Billions in Equity Through Refinancings
Realty Times (08/13/07); Harney, Kenneth R.
Freddie Mac’s “Cash-Out Refi” report for the second quarter indicates that $76.7 billion in equity was extracted by refinancing from April through June. About 83 percent of refinancings during this period involved cash outs that boosted the new mortgage balance by 5 percent or more, down from a record high of 88 percent last year. Additionally, the median increase in interest rates was one-eighth of a percentage point above the original rate. Freddie Mac deputy chief economist Amy Crews Cutts predicts a 33 percent decrease in cash-out refinancings over the remainder of the year, though she insists that homeowners have plenty of equity to extract–if they so choose–during this extended period of reasonable mortgage rates.
Let’s hope that the market can settle down and we can get back to business!
more tomorrow
Denise