I was at an agent's breakfast sponsored by my firm, Long & Foster Real Estate this morning down in Maryland. A corporate exec showed me this article he had printed off from the Washington Post.  In fact, there are articles all over the web in the mortgage world, some of which I've linked below.

Folks, things are about to get ugly.  With the overnight demise of American Home Mortgage, who filed this morning for bankruptcy, an industry-wide pullback has been initiated.  With the rapidly-declining market for mortgage-backed securities tied to subprime and Alt-A loans, top lenders are revising policies and raising rates.  Apparently some high-level meetings are happening this morning west-coast time which will affect big lenders like Countrywide and National City.  Some observations from an industry insider who commented this morning:

1. Jumbo loan (over $417,000 in Lancaster) rates are going up 5/8 of a point within a week, across the board.
2. 100% financing programs are going away.  If your mortgage broker says they can do one after a few more weeks, don't believe it.
3. Stated Income programs are going away.  Risk reduction is the new buzzword.
4. Stand-alone second mortgages are going away.  "80/20" arrangements...More risk reduction.

Our advice at this morning's meeting was to get any and all mortgage rate commitments in writing, verifying the actual lender if you are working with a broker.  If you are on the fence about buying, don't wait!  Everything is going to get much harder in the weeks and months to come.  For realtors, time to pull out the contact list and get calling.  Your clients will thank you later (especially if their loan is likely to be a jumbo one).  You can contact our Lancaster mortgage expert Dan McCormac for more info, too.

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For Lancaster PA homes for sale click here.  Jeff Geoghan is a top real estate expert in Lancaster County, PA, and  an involved community member.  Jeff's work has been featured in the Lancaster Newspapers, WGAL Channel 8, PA Business Journal and Wall Street Journal.  Jeff's blog on Lancaster County and its homes is nationally-featured.  Contact Jeff for more help with your Lancaster PA Real Estate needs.