Aloha,
Now I am not talking about the legendary 1980's rock song by Queen. I am talking about another lender going bankrupt. Today I received an email form Asset Mortgage saying they temporarily closed their doors. They are affiliated with First Magnus who filed for bankruptcy on August 21.
This has been a common place lately. According to NPR as of August 1, 12 of the top 50 mortgage companies have gone under. I just read the other day on Marketwatch.com that 120 lenders/brokers are now out of business. Bank Of America just bought $2 Billion of Countrywide preferred stock to help with their liquidity issues.
So what does this mean to you?? It is harder to get loan approval now. You may have to improve your FICO score before you can buy. A larger down payment may be required from you. You may have to buy a more affordable home. And this doesn't even put the appraisal into consideration.
So what can you do NOW!!! Be prepared. Get pre-approved first. Work with a Realtor that has a team in place that can help you navigate though these challenging times. There are many great values in this market right now. Remember opportunities exist in all market conditions. Some people will go bankrupt others will prosper.
I am an optimist and know we will get through these lending issues.
Mahalo, Dan
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Wow!!
One day after I made this statement about our current lending situation, President Bush and Federal Reserve Chairman Ben Bernanke are coming to our rescue.
I have read in many blogs that are denouncing this program, but I think it is a good faith gesture and a start to build confidence in the mortgage industry. This new product from FHA called FHA-Secure may be able to help thousands of home-owners remain home owners.
This is far from over , but today the government actually is taking an initiative and publicly acknowledging the problem and that no quick fix solution or total bailout is going to happen.
Time will tell how receptive this program will be. Stay tuned!!! I am excited to learn more about this development. This news was very favorable on the Stock market today with the DOW increasing almost 120 points and NASDAQ climbing over 30 points.
Mahalo, Dan