Admin

What do you think the requirements are going to become for mortgage applicants?

By
Services for Real Estate Pros with MyEssistant

Ok - so we have determined that ActiveRainers are feeling that interest rates are going to remain around the same for the next year or so (hovering around the 6% - 7% range).

Any thoughts now on which way qualification requirements are going to go?  We know the lenders are becoming more restrictive - but HOW restrictive will it get (and how long will the mega-restrictions last)?  Will subprime ever make a comeback? Is there a place and demand in today's marketplace and economy for subprime?  Is subprime simply irresponsible lending - or is it a legitimate new-ish product that has simply hit a snag? Will the government really intervene and flex it's lawmaking muscle?  

I know a number of my broker and real estate agent clients are having a heck of a time getting their very eager applicants qualified -- how bad do you think it is going to get?

Thanks everyone for your thoughts on this!!!

Show All Comments Sort:
Matthew J Blum - (retired from the business)
Palm Beach Gardens, FL

You will always have a sub prime market.  Risk = Rate.  I really do think we have seen the worse in the underwriting guidelines changes.  We just have to wait until the dust settles and then it will come back.

Deirdra nice post by the way!

May 19, 2007 04:08 AM
Jay Beckingham
Christensen Financial Mortgage - Port St Lucie, FL
Seniors ROCK!

wow that's a lot of questions.

subprime is alive and doing quite well. the media has bown this out of proportion.

first i suggest that learning as much as possible about fha will satisfy many clients with credit issues, job situations and other issues which many lenders just automatically pushed into subprime lenders.

traditionally when the market undergoes guideline changes that become more restrictive they over react. i'm already seeing some institutions lightening up a bit from their initial reactions.

 as long as there is a need/desire for a product the market will provide it.

 

May 19, 2007 04:16 AM
Terry Lynch
LAR Notary and Closing Services - Saint Clair Shores, MI
The rates had better not go up, that would be devastating here in Michigan.
May 19, 2007 04:29 AM
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

This business is in cycles, what has happened recently has occurred before and will again. 

The FHA will continue to be important, first time homebuyers having cancelled rent checks (12 months worth) will continue to be important, reserves (having assets) will be important, and the low & no doc loans will continue to be out there, only with tougher guidelines and LTV requirements.

As far as rates go, we've become very spoiled.  I don't care if rates are 10.5% across the board, people will always buy houses and need money.

Nice topic for a post Deirdre!

May 19, 2007 05:05 AM
Jacob Morales - Arizona Mortgage Planner
US Bank - Scottsdale, AZ
Rates will almost certainly go up if the trend continues on Wall Street. I think we are hoping for the best, but no matter what anyone says it is definitely harder to do loans than it was a year ago. I don't think that is necessarily the worst thing in the world, but it certainly means we all have to work a lot harder. Thanks for the post Deirdre. 
May 19, 2007 05:10 AM
Esko Kiuru
Bethesda, MD

Deirdre,

Subprime is here to stay. It's serving an important market segment. Lenders are just getting tougher on the underwriting guidelines. Also, most subprime borrowers are making their payments, so those having trouble is a small minority. The media hyped it up too much.

May 19, 2007 05:34 AM
Robert Whitelaw
Whitelaw & Sons Real Estate Services - Morgan Hill, CA
Broker, CEO, Realtor , ePro
Well... since we are coming off a huge time of stupidity when folks could get loans without having to provide ANY support for their income claims, I would guess we are just going to see folks actually having to back up what they claim on the loan application. Nothing crazy. As most have mentioned, its a case of the media emphasizing the worst case scenario, even if that scenario is so unlikely that it is not worth considering.
May 19, 2007 06:10 AM
Peter M . Christopher
Fairfield County Home Inspection LLC - Fairfield, CT
Residential & Commercial Inspections in
Ask Nima at www.mynima.com  this guy is the top in his Field and is a AR blogger.
May 19, 2007 07:09 AM