I thought this practice had been in place for a while now. I had always heard that 720 was the breaking point between A paper and B paper loans.

I thought this practice had been in place for a while now. I had always heard that 720 was the breaking point between A paper and B paper loans.

Hi Ann;

Thank you very much for sharing, this information is very good for the public.

This makes it someone tougher because of the payment adjustment...good motivation to get some buyers to buy now.

The lenders that we work with have been using that number here for a few months now.

Thank God that lately we have been getting cash buyers, makes it so much easier.

The squeeze is more like a hold-up.  Until the credit system is reformed in a big way, things aren't going to get better in the housing market.

            I remember going to a bank in 1970 and needing a business loan of $10,000.00.  They told me that when I have $10,000.00 in savings, they could make the loan......Seems those times are creeping up on us once more.  Lenders want to penalize the very people they need to survive, because of their own mistakes....makes no sense.

Great BLog Suzie, I mean Ann, you are a wealth of information!  Keep the "food for thoughts" coming, getting several different prospectives on the current mortgage crisis, is great information I love to share with my clients.

Forge ahead! 

Don't forget to add that for scores below 680, the hit to "price" ranges from 1.25% to 2.75%, which can result in a rate bump of .375% to 1% or more, depending on the pricing structure developed by the particular lender's secondary marketing department.  It's a great reason to go the FHA way!  FHA does not require any score-driven loan level price adjustments, and most FHA lenders don't impose any unless there is no credit score or the score is below a certain level, usually somewhere between 580 and 620.

Do you think this will cut down rate shopping since it's harder for consumers to make comparison without getting their credit pulled?  It is definately making FHA look better for buyers with lower scores or lower down payments.

Thanks for the link.