The Subprime world as we knew it has changed and continues to change as updated (I guess daily) at MortgageImplode.com. I have a No Doc deal that was with Wells Fargo BC and the home needed some repairs completed before we closed. I got a call from my SC AE this week that their SC branch was closing and everything will be going thru Louisianna now. She assured me everything was okay with our full package deal since we were only waiting for the work to be completed for our Clear to Close this week.

I got a call from the UW yesterday that all of that branch's files were being audited to ensure accuracy since they were closing. My wonderful UW had missed a payment shock guideline that we were never made aware of in writing or verbally and apologized that she could no longer close the loan because it was out of the guidelines -spoke to the AE and she may not have a job herself...

I thought to myself -No problem -I've got a back-up plan like any good LO. So I called my back up plan and was told that they had closed yesterday and would not be honoring any pre-quals if the package was not in their office.

NOW WE HAVE A PROBLEM!!! I sent the package to some great portfolio lenders: CIT and Equifirst as a Stated Income /Stated Asset deal since they can no longer do this loan as a NO Doc either. I should know by tomorrow if it will work. 

On the sunny side of the mortgage business, for all of my Full Doc Non-Prime stuff - I've been using FHA for the past 12 months since it has given my usual SUB-Prime clients awesome rates and Low down payments. For example: Tomorrow I am closing a 95% LTV OO SFD Refi paying off the 1st and 2nd mortgage as well as her Ch. 13 Bankruptcy while giving the client  a 6.75% Fixed rate for 30 years!!!  She is so excited - she is bringing me Girl-Scout cookies to closing.  

With Sub-Prime being as  volatile as a volcano, I'm going to be using a lot more FHA, VA, and Rural Housing for my clients.

Does anyone know if FHA does stated?

I know, I know -  keep dreaming about this paradise.