First Magnus has Stopped Funding Loans!...And sundry other market musings

Add another lender to the list suffering from this difficult real estate environment.  Will this be the last lender to face difficulty?  I think not. 

Mortgage lenders package millions of dollars of loans and turn to the secondary market (the stock market) to securitize the assets (mortgage backed securities) and sell them on the open market.

The stock market has been experiencing turbulence recently.  The stock market has to stabilize, and digest the changes being made to lending practices, before they will again embrace instruments based on anything less than A paper mortgages. 

Our markets are efficient...sooner or later poor quality investments and the industries that create them will be made accountable.  We are feeling the hurt from that right now!! 

 

 

2 Comments on First Magnus has Stopped Funding Loans!...And sundry other market musings

Yes I know.  My clients set to close tomorrow are casualties of First Magnus!

08/16/2007 02:30 PM by Sandy Noll - Realtor, eAgent (Keller Williams Realty Kirkland)

Sandy,  I was discussing financing with a Realtor who I respect as he has 25 years of experience,  and when I could not promise 100% financing for that particular buyer... he commented how he was to close with another party that was doing 100% purchase financing with First Magnus. 

With the way lenders were pulling products off the table daily, I knew I would regret making promises that I could not back up, so I held my tongue and pushed the FHA 97%, which the buyer could qualify for as a more realistic option.

Days later I received a call that the First Magnus deal blew up and the property was available and the buyer was very willing to contribute 6% etc..

08/22/2007 11:54 AM by Stephen C. Olczak (Trust USA Mortgage Corp)

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Loan Officer: Stephen C. Olczak (Trust USA Mortgage Corp)
Stephen C. Olczak
Fort Myers, FL
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Trust USA Mortgage Corp

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