Important Notice Regarding The Mortgage Market
In response to changes in the Mortgage Market and the unprecedented liquidity crisis in the Secondary Market, programs we have learned to love over the years are no longer being offered. Simply put, creative loans that were available yesterday are probably are not around today. The good news is the Secondary Market is quickly adjusting to Warehouse Banks and Investors guidelines and bringing out new programs. The bad news is that these Program changes are occurring daily, and many of the creative Programs familiar to us are gone for the foreseeable future.
The primary changes taking place have to do with credit scores and collateral criteria. The Secondary Market has readjusted credit scores markedly higher on any programs that allow Stated-or variations of Stated-income loans. On average, the minimum acceptable FICO Score to go Stated now is 680 or higher (in the recent past they went as low as a 620 FICO Score). On the collateral issue they are starting to require a minimum of 5% down, whereas recently no money down was the norm (100% financing).
A lot of mortgage companies have closed recently due to these market conditions and many more are having a very hard time staying open-so be careful where you refer your clients. Unfortunately, the public is the one being hurt during these difficult times. Customers are getting hit with last minute surprises as programs are discontinued and the alternatives offered usually have a much higher payment than they anticipated. Many times this higher payment derails the transaction, hurting everyone involved.
The best way to avoid these problems is to work with a Mortgage Broker such as Central City Mortgage. Mortgage Brokers are not limited to one set of underwriting guidelines and usually have many more relationships to secure the Loan Program quoted to your client. Our best solution is to face this difficult market together; I've always found that the strongest relationships are those forged in adversity. We'll be your partner by steering you through these market adjustments.
Please feel free to call upon us at any time if a transaction experiences a last-minute problem with a program change, and we'll do our best to help get it closed at a payment that will satisfy your client.
Sincerely,
Justin Greenhalgh
Central City Mortgage - 909-561-5432 Cell - 909-356-0956 Office - www.ccmloan.info
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