U.S. CitiesCity-Data Forum Index
Happy Halloween!
Go Back   City-Data Forum > General Forums > Real Estate > Mortgages
 [Register]
Please register to participate in our discussions with 1.5 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Jump to a detailed profile or search
site with Google Custom Search

Search Forums  (Advanced)
Business Search - 14 Million verified businesses
Search for:  near: 
Reply Start New Thread
 
Old 08-02-2007, 01:11 PM
 
694 posts, read 1,869,197 times
Reputation: 302
Default Mortgage companies in trouble

I was talking to a lender and things seem to be going VERY wrong... It looks like BIG trouble ahead. People can't close because their (supposedly) mortgage company is going belly up, rates are going UP, etc. etc. Is that the doomsday? The big crash? yikes.
Reply With Quote Quick reply to this message

 
Old 08-02-2007, 01:24 PM
 
3,318 posts, read 7,238,181 times
Reputation: 1361
Another reason to use a VERY REPUTABLE LENDER!

Not doomsday however, It may actually good to have a little "cleansing" of the weaker/shadier lenders out there.

The bottom 10%+ of borrowers (subprime) probably should not have been buying homes to start with. Otherwise there is still plenty of money to be had for decent borrowers. 100% financing at that. So, not the big crash but it will certainly add time to the recovery period.

Definitely going to be a plus for the landlords out there as the rental pool will be stronger.
Reply With Quote Quick reply to this message
 
Old 08-02-2007, 01:25 PM
 
3,318 posts, read 7,238,181 times
Reputation: 1361
Quote:
Originally Posted by Grass Is Greener View Post
I was talking to a lender and things seem to be going VERY wrong... It looks like BIG trouble ahead. People can't close because their (supposedly) mortgage company is going belly up, rates are going UP, etc. etc. Is that the doomsday? The big crash? yikes.

...and rates are actually pretty stable at this time. A 30 year fixed is around 6.5%. So, rates are still very attractive!
Reply With Quote Quick reply to this message
 
Old 08-02-2007, 05:45 PM
 
Location: California
510 posts, read 2,279,625 times
Reputation: 366
Unfortunately "very reputable lenders" are quite susceptible to going belly up as well. One of last years top 10 is just about to close it's doors... I know of a few subprime big boys that are years old that are closing offices and consolidating... The big banks who do stuff other than mortgage, and the companies deep into the servicing profit are the only ones I would consider completely safe from closing.

Basically the subprime market is become much more strict, with much higher rates. The Alt-A creative program market is taking hits with rate increases as well. If you don't have great credit, with some good equity, it's very likely you won't benefit from a new loan, even if your current loan has hit it's nasty adjustable period.

There's going to be a lot more foreclosures over the next year, which should drive down houses more, or at the very least stop any increase in value.
Reply With Quote Quick reply to this message
 
Old 08-02-2007, 08:37 PM
 
Location: Gainesville, VA
566 posts, read 2,114,675 times
Reputation: 145
Quote:
Originally Posted by UseJeff View Post
One of last years top 10 is just about to close it's doors...
I have a feeling that we will see more of the lenders that implemented CDU, or another proprietary AUS, into their operations over the last 4-6 years go down in flames. Some of the loans that I saw get approved are just unreal.
Reply With Quote Quick reply to this message
 
Old 08-03-2007, 01:06 AM
 
Location: California
510 posts, read 2,279,625 times
Reputation: 366
This was an interesting link to check out that this user posted in a different thread...

Quote:
Originally Posted by FarNorthDallas View Post
Here's a list of lenders that have gone belly up. It's towards the bottom.

Bloomberg.com: Investment Tools
Reply With Quote Quick reply to this message
 
Old 08-03-2007, 09:37 AM
 
3,318 posts, read 7,238,181 times
Reputation: 1361
Here is a good article on the Alt-A and subprime paper being basically unsaleable at this time: Home Borrowing Costs May Soar Amid Crunch (Chief Consolidated Mining Co. (CFC), Fannie Mae (FNM), Freddie Mac (FRE), Morgan Stanley Insured Municipal Bond Trust (IMB), (US313400)) | SmartMoney.com

I am glad that 99% of my business is A-paper and saleable to Fannie, Freddie & Ginnie. I can do Alt-A and subprime, but I never liked it much.

I work at a small community bank, but basically in a broker role (corrspondent lender). Most of the loans I do are sold to US Bank, Countrywide and CitiMortgage. Like Jeff said these companies aren't going anywhere.
Reply With Quote Quick reply to this message
 
Old 08-03-2007, 09:40 AM
 
Location: California
510 posts, read 2,279,625 times
Reputation: 366
I'm moving marketing away from possible subprime clients quickly. My biggest problem now is the conforming loan limit of $417K. So many homes here have bigger loan amounts than that... alot of lenders are no longer taking the approve/ineligible and just using Fannies guidelines.

I think I'm just going to go stand on a corner with one of those dancing arrow signs. On the sign it will read "Amazing Credit? Great Equity? Loan Amount less than $417,000? Call now!"

(For those who think I've gone daffy... it's commonplace here to see local businesses advertise using humans on corners with big signs. They dance around and spin them to get your attention)
Reply With Quote Quick reply to this message
 
Old 08-03-2007, 10:18 AM
 
127 posts, read 186,636 times
Reputation: 128
Default What next?

Okay, so it would seem that banks/lenders are sitting on a whole lot of real estate and their pile is growing. What's going to happen with all those foreclosed homes? We haven't heard anything from the lenders yet about their plans for all that inventory.
Reply With Quote Quick reply to this message
 
Old 08-03-2007, 10:19 AM
 
Location: Florida
2,301 posts, read 4,143,123 times
Reputation: 2250
I'm happy that rip-off companies like Ameriquest and New Century that were making 4-5 points per deal are going belly up. Like Justin "The New Michael Jackson" Timberlake said, "What goes around comes back around."

Always shop the heck out of these mortgage companies until you find a loan officer willing to do your deal for one point -- or LESS if your loan amount is over $250,000.

Just a friendly tip from an unbiased mortgage guru that isn't involved in this business and wants nothing to do with it.
Reply With Quote Quick reply to this message
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.

Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.


Reply
Please update this thread with any new information or opinions. This open thread is still read by thousands of people, so we encourage all additional points of view.

Quick Reply
Message:

Over $84,000 in prizes was already given out to active posters on our forum and additional giveaways are planned!

Go Back   City-Data Forum > General Forums > Real Estate > Mortgages

All times are GMT -6.

2005-2014, Advameg, Inc.

City-Data.com - Archive 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25 - Top