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Another One Bites the Dust - Get Your Loans Funded NOW!!! (and a great link).

By
Mortgage and Lending with Mortgage Advisory Group CL-36130

Here is the great link:  http://ml-implode.com/

31 Lender Under - How Many More Can We Lose?

Same story when I come in to work everyday.  One lender calls to tell me of three others shutting down for business or being bought out.  He wants my to pilfer my pipeline.  I usually give the same canned answer.  "all of my loans are conforming.  Thanks anyways".

The interesting thing to me is the effect this has on all of the advertising we hear about - as a lender I constantly get emails and calls regarding the current boom of adjustable rate mortgages setting to expire.  You've all heard the ads.

A large amount of these buyers are subprime (not all).  So what happens when this subprime buyer doesn't make his payment on time?  The statistics say 10.1% of these loans are participants in mortgage lates.  This buyer can no longer refinance his loan in most cases (investors don't like late payments).

I have seem adjustments increase mortgage payments by over $400.00 on numerous occasions.  It is very difficult for homeowners to adjust and in many cases this leads to foreclosure.

To make things even more difficult, the value of homes is dropping in many areas of the US, also making it difficult to refinance with timely payments.  We should all be thankful we live where we do.  #2 city in the nation in home value appreciation (haven't you read today's Wenatchee World?).

I must say thanks to Fannie Mae and Freddie Mac for making my job a little easier.  They seem more than willing to adapt their loan programs and make it easier for both the lender and the consumer - adding 40 year terms, interest only loans, etc.

Now I just need to figure out how to replace the 4 subprime lenders I lost from this list...

http://ml-implode.com/

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Eddy Martinez
Nationwide Funding Group - Highland Park, CA

Kevin i wrote a blog similar to yours.

Deutcshe Bank is currently taking over the subprime market, have you heard of them?

Eddy

Mar 05, 2007 09:45 AM
Kevin Nelson
Mortgage Advisory Group CL-36130 - Wenatchee, WA
MLO-121548

I haven't, but I will take a look.  Thanks Eddy.

 Kevin

Mar 05, 2007 09:49 AM
Cynthia Sloop
Community Association Manager - Indianapolis, IN
Wow, that is quite an impressive site!  I had a feeling this was going to happen when I saw all these over-night mortgage companies pop up a few years ago with all these programs  that really made it easy to lend money to people with blemished credit.  Now add loss of manufacturing jobs in the mid-west, buyer's market, ARMs readjusting, low or no appreciation to home values, etc. etc. and we have a crash and burn.
Mar 05, 2007 11:45 AM
J Perrin Cornell
Coldwell Banker Cascade Real Estate - Wenatchee, WA
Broker, ABR, VAMRES

Ok, ok the sky is falling, the sky is falling.

There are many sides to the story. One of the lenders in the link had pulled back because their warehouse lender had shut them out, presumably because of the risks in sub-prime. Look a little deeper. The warehouse lender mentioned has been cut short by the Feds for failure to do enough lending in depressed or economically challanged areas. As a result they are loosing their ability to be allowed to make certain type loans. At the same time BofA, who is meeting the Fed requirements, is expanding theris.

There are always (well it seems like it) excesses in any run up of anything. What we are seeing is the shakeout of the people/companies that were on the margin anyway. Kind of like the sun... happens all the time. Mortgage Bankers in the mid to late '70s, Thrifts in the mid '80s etc. Perhaps slightly different reasons but still the same ole problem... greed and fear.

I, in general, agree with what Kevin is saying. I disagree on two points... it really isn't all that bad (by the way... the company I work at, handles the FNMA foreclosures for the two county area and our number is below 2006 and 2005) and "the value of homes is dropping in many areas" is a bit of an overstatement. As I often write there is a quantum leap between actually dropping and just dropping from previous all time highs but still increasing (1% over last year is still an increase and 2006 was the third biggest year in real estate since stats were first maintained). Actual deflation in the housing market is very rare and if happening very localized.  Banks have a lot of avenues open other than foreclosure, markets go up , down and recover and as Annie sez..."the sun will come up tomorrow...bet your bottom dollar ther'll be sun..." or as an attorney I know was quoted as saying..."some lenders will lend to a doorknob"... I think the sun is more reliable ...

 

 

Mar 06, 2007 12:40 AM