I really do not know how to spell it but here is a picture. Most likely it would be spelled "shoo" or "phyew" but it is that sound you make when you just came through a strenuous time. That is how I feel as an investment lender.
Just a few years ago you had to have a credit score of 720, 6 months of reserves for ALL of your debt, full doc income AND twenty percent down to buy an investment property. From about 18 months ago until last month you could get 100% financing with NO documentation and a 620 middle score for an investment property.
Bad idea. If you haven't read Stop The Bleeding please partake.
So here is "some" news on the investment financing front:
Wall Street adopted a ten max financed rule. Rapid Acquistion only applies to Investors with less than 2 years multi-property management experience. It is 2 properties in 6 months or 4 in 2 years.
I do not know of anyone doing the 680 100% NOO anything other than full-doc anymore. The days of the crazy loans are done. Ed Moore with Equibanc told me Wachovia shut them down this morning. That’s the 2nd lender down this week.
The volume/revenue coming in is not enough to keep up with the crazy loans going bad. When you see Top Ten lenders like SunTrust, Bear Sterns, Wachovia, Countrywide, and us start cutting programs/LTV’s you know small lenders are going out. When you see major companies like Own IT and MLN shut their doors you know the crazy loans have to go. We have to get back to doing smart business. If we continue to make these crazy loans the industry will go down the tubes and we could ruin the housing market by flooding the market with foreclosures. I talk to brokers, account executives, and Loan Officers with other companies daily and have been told on more than one occasion that SunTrust and Bear Sterns both cut all their products to 90% LTV/CLTV max. The trend is some lenders are enforcing the chargeback clause in their Broker Agreement for loans that go bad and/or loan that contain fraud.
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