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.