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Real Estate Agent - Beware of deals in the works with Sub Prime Lenders

By CT Low Mortgage Rates CT VA Mortgage,CT , CT USDA Loans

Mortgage and Lending with Connecticut FHA Mortgage Loans, CT Mortgages

March 07, 2007 03:54 AM

Unless you have been under a rock the past 3-4 weeks you are well aware of the sub prime indutries troubles. With over 30 Lenders shutting down or selling out the trouble seem to just be getting larger everyday.

Those Agents with customers that are borrowing from a sub prime lender need to make their customers aware that their loans may not close!

Without notice several lenders in the sub prime world are closing shop, so what happend to the deals that are in the pipeline? Well it's simple... They don't close! Which means your buyer(s) and the sellers are pretty much out of luck unless the buyers are able to get a mortgage from another sub prime lender. Getting a mortgage in the sub prime world is getting tougher by the day as guidelines have tightened and are going to get only tighter.

Here at Wells Fargo our sub prime division has not been affected much at all as we have always had a more conservative view than some of these loose goose type lenders who are now feeling the effects of their risks.

The bottom line is many people still have no idea what is going on in the sub prime world and may not even realize their deals may not be closing if the lender they started with closes shop.

Over the past few years there were times where Agents would tell me about those lenders who can do deals we here at Wells could not do inhouse, now those lenders are out of business as we continue to be a leader in the mortgage market.... Funny how things work out.

Good luck with those deals in the work with sub prime lenders.

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Anonymous

Affected by sub-prime mortgage demise: wanted to ask your opinions:

After a year of working on improving my credit score it went up from a mid 480 to a mid score of 581. I have little debt just 26k that I owe on my jeep and about 8k in student loans. No credit card debt. My scores are low because of a few collections and judgements from college and not paying credit card bills on time and one charged off.
Everything on my credit is current now and my three scores are
Equifax - 605
Transuion - 581
Experian - 566

I started my property search in Feb with a mid credit score of 581.
The property sale price is 539,000k and I planned on putting 5% down.
The first lender Suntrust quoted me with 5% percent down a GFE
of 40yr/fixed at 9.725% no points
9.050 1 point
8.3 2 points
2% pre-payment penalty

Another lender FIRST bELMONT Mortgage that I submitted an app for came in with a
2/48 ARM BALLOON loan at 9.5% with 5% down
2% pre-payment penalty

I was gonna go with Suntrust because I use them for my personal banking and I figured
that they were the more stable company and the closing should go pretty smooth. Right around March
and the sub-prime mortgage turmoil both of these lenders new guidelines forced me to have to put 10% down on
the loans.

The rates on the loans pretty much remained the same. I was pissed but
was told that this is the only why the loan would ever get approved. Im currently
saving money for the down payment which will leave me with no reserves. I make about 10k
a month and am looking at a payment of about $4500 on a loan amount of 485k. The seller and realtor help is
12.5k...

My close date is set for end of may or as late as end of june depending on if im able to come
up with all the money needed. I have about 38k in savings now and will be around 48k in end of May.

I recently signed up with the Lending tree just to see if there was anyone out there that could
do better then the 9% rates and because I cant believe with putting 10% down im still facing these
charges. I found a guy who thinks he can get it done for me at 30yr/fixed at 7.875% with Surepoint lending but
he sent me a GFE based on a mid score of 620. He thinks he can get my credit up to point by the end
of May by helping me clear up a judgement in the amount of $208 dollars that has been on my credit
since 2002. All the other brokers told me not to touch it because its been dormant and may have an
adverse effect. At this point I dont know what to do. I dont feel comfortable putting 10% down and
paying such horrible rates. Im very tempted to just call it all off. I have 3k put up for my earnest deposit.
Im almost just willing to let that go because i worked with my realtor to get a financial contingency in the contract
but it turns out the contingency only covered getting pre-approved which in this market doenst mean
anything! i want to fire her but i signed a buy agent agreement and i cant use another agent for 6 months
which will be August which could work out if i decided to just wait for my score to improve. Im also
studying for my Realtors license and am thinking about representing myself if the deal does not go thru.
Im open to any advice? Should I just be patient and continue to wait although i love the home and its
very unique for this area.

Apr 24, 2007 09:35 AM

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