Special offer

Zero-Down Mortgages Get Harder To Find

By
Real Estate Agent with United Realtors, LLC

Countrywide Financial Corp. has instructed its brokers to no longer offer zero-down mortgages as an option for borrowers, the Wall Street Journal reports.

That’s because such loans are among the biggest reasons for a recent and sharp increase in the level of delinquencies at U.S. home lenders.
Countrywide joins such other companies as General Electric Co.’s WMC Mortgage and Washington Mutual Inc. in requiring that loan applicants have at least a 5-percent stake in their homes.

Previously, “if you breathe and have a Social Security number . . . you were going to get a house,” notes Mark Cady of Market Street Mortgage in Houston. Now, lenders are demanding that applicants have higher credit scores and contribute a bigger down payment, among other requirements.

While the flow of money available to the subprime borrower community is likely to slow considerably as a result of this trend, observers note that lenders not subject to federal regulation will continue to offer higher-risk products such as 100-percent financing and interest-only loans.

Sources: Wall Street Journal, Houston Chronicle
Originally Published On: Realtor Magazine Online

Comments (2)

Joe Long
Waterstone Mortgage - Madison, WI
Purchase Perfect

The availability of Zero Down mortgages has not shrunk, just those able to provide them.  FHA, Wheda, VA MyCommunity and Flex 100 are all still offered at conforming interest rates.  What is dwindling is the presence of lenders versed in and licensed in offering these products.  That is why all Realtors should have a solid partnership with a reliable Mortgage professional.  Realtors should not be penalized because their buyers cannot be qualified!

May 27, 2007 06:03 AM
Greg Zaccagni
The Federal Savings Bank - Wheaton, IL
Illinois Mortgage Lender