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The Secret Word is "Risk"
 
Ok, Maybe it is not so secret but it is a term that is the most important in our industry right now.  When it comes to making a loan the rules have changed.  In looking at the Three "C's "of Capacity( can they pay), Credit ( do they pay) and Collateral (the property) there are new rules for each. Actually, they are not new rules at all. They are old rules.
Starting with Capacity we have seen many "reduced doc" and "no doc" loans go by the way side.  In fact, in many states, including Ohio, it is illegal to make a mortgage loan without verifying the borrowers ability to pay. In some cases the automated underwriting systems from Fannie Mae and Freddie Mac will ask for only verbal verifications of employment.  We are now seeing many investors asking for pay stubs, W-2's and/or Tax returns regardless of the findings. 
Trying to cover the credit changes would possibly overload the servers.  Just know that there is true risked base pricing now.  Buyers with scores at 679 will have considerably less financing options open to them than the borrower with 680 scores.  Additionally, and this applies to all of the three "C's", ... more

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