Changes in the Mortgage Industry

     Your probably aware that there are problems in the mortgage industry in the sub prime and Alt-A lending arena.  The problems occured because underwriting standards became too lax.  This has resulted in higher incidences of mortgage defaults and foreclosures.
WHAT DO THESE CHANGES MEAN FOR THE LENDING INDUSTRY?
      * Some loan programs are being eliminated and underwriting guidelines are becoming more conservative.
      * The difference in interest rates between Conforming loans (less then $417,000) and Jumbo loans are 
      widening significantly, in some cases as much as 1.0% to 1.5%.
      * Fully documented loans are becoming the norm.  Stated income and asset loans will be requiring at least
      10% down and available only to well qualified buyers.
      * Mortgage insurance is coming back to help structure loans with less then 20% down.
WHAT DOES THIS MEAN TO REALTORS?
      * Stated income buyers will need high credit scores (720+) and a minimum of 10% down
      * Agents should “re-approve” their buyers
      * Always carefully review pre-approval letters
WHAT DOES THIS MEAN TO SELLERS?
      * Work with a trusted realtor (like myself) and lender (I can help direct you here)
      * The market for seconds has momentarily dried up…some exceptions
 WHAT DOES THIS MEAN TO BUYERS?
      * If your currently in contract to purchase talk to your lender and make sure that there are not any issues
      with your loan due to recent industry changes.
      * If you were pre-approved before 8/1/2007 you need to have your lender re-verify your terms in writing.

Mortgage Industry Meltdown

What’s Happening?
     In recent weeks, lending criteria for home mortgages have tightened considerably, making it more difficult and expensive to borrow when purchasing or refinancing a house.
What Happened?
     First, housing prices, after enjoying a huge run up over several years began cooling. Then, many borrowers who had taken out mortgages with low teaser rates could not make payments when those variable rates reset.  Mortgage delinquencies and defaults, especially in the sub prime market, began rising.
     As a result the secondary market on Wall Street for sub prime and other risky home loans dried up. Most home loans are repackaged and sold to investors.  Now, faced with nowhere to sell those loans and get fresh capital, scores of lenders all over the United States have closed, went bankrupt, or stopped making certain kinds of loans.
How will this affect Real Estate Sales?
      In the short run the impact of this Mortgage “Crunch” may be profound.  Already in Marin County we’ve seen real estate transactions fall apart as lenders become more restrictive with their lending parameters. Right now, fewer of the remaining lenders are offering second mortgages, 100% financing, loans to people with poor credit, and “no doc” loans that require little evidence of income or assets.
      Even though there are some lenders that say they are still funding loans to those with good incomes, large down payments, and strong credit scores…consumers will pay higher loan fees to compensate for the fact that the market for repackaged loans is skittish and many lenders must keep these loans in their own portfolios.
      Stay tuned.  The immediate impact appears to be significant.  The Mortgage Brokers I’ve spoken to in Marin County believe this is temporary.  But truthfully, only time will tell.

If you need help check out:
www.bankrate.com  Free, online source for personal finance information. Has an entire section on mortgages and local rate comparisons.
Or, contact a reputable local mortgage broker!
 
     

     
    

What Realtors Do To Earn Their Commissions

What do Real Estate agents do to earn their commission ? Ever heard that question? Here’s a comprehensive and humorous take on that very question from a Home Inspector who’s worked closely with Real Estate practitioners.
   ”They don’t do @*!?&% thing! Why they just stick a sign in the yard and make easy money.  I could do their job any day of the week.”
   Well, maybe you could do their job.  But it just won’t be any day of the week.  And if you intend to be successful at it (which means satisfying a bunch of clients, mortgage lenders, appraisers, and countless other associates), it will probably be EVERY DAY of the week as well as most nights, weekends, holidays, anniversaries, special occasions, sick days, snow days, and unpaid vacation days.
   Understood, there are Real Estate agents, and then there are good Real Estate agents.  Just like Doctors, Lawyers, and Indian Chiefs.  This article is about the good ones.  The ones who go to work before,during, and after the times mentioned above.
   To serve their clients and stay competitive in their profession, today’s Real Estate agent are expected, assumed, requested, required, and or demanded to perform, be knowledgeable of or have access to the following: Information Brokerage Services, Multiple Listing Services, tax rate adviser, appraiser, mortgage lender,financial planner, legal expert, credit counselor, city planner (fortune teller),building inspector, chauffeur, shuttle service, travel agent, tour guide, delivery boy, order taker, public relations expert, therapist,marriage counselor, family doctor, nurse, baby sitter, advertising executive, general contractor, construction estimator and superintendent, and multi-talented subcontractor (not excluding locksmith, yard man, maintenance man, garbage man, plumber, electrician, decoder scientist for alarm systems and programmable thermostats).
   They’re often perceived as the bad guy when interest rates go up and the bad guy when your house doesn’t sell by 10am the next day.
   It’s helpful if their talents include being a diplomat, a negotiator, a referee (similar to those used in Roller Derby and Monday Night Wrestling) and, in general, a walking bureau of information for everything about anything – including whose check is good and whose wife or husband isn’t.
   They must know about schools, churches, governments, public utilities, crime rates, world affairs, this weeks jail term for this weeks Environmental Protection Agency violations, future developments that no one has ever dreamed up yet, transportation, shopping, day care, soccer, T-ball,how many termites it takes to eat a house, every homeowners association formed since 12 BC and what kind of fences they don’t allow, should you water and fertilize the Bermuda grass before, during, or after mowing, the best place in town to buy pizza, if you can buy beer on Sundays, and at least two dozen other skills and talents that I don’t have room to mention.
   So, be nice to your broker/agent.  Next time you start thinking. “They have it so easy”, go spend a day with them.  You’ll soon realize that, like most of us, they work hard for their money, and your satisfaction really is important to them.

Mark Lomas              Marin Real Estate Blog                    MarinCountyRealEstate@gmail.com