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Old 09-15-2008, 03:48 PM
 
Location: Broward County
2,518 posts, read 9,714,935 times
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I know that every month lenders get more and more strict...but does todays news about Lehman going under bear any relevance on someone trying to get a mortgage say 4-5 months from now ?
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Old 09-15-2008, 04:08 PM
 
28,906 posts, read 45,345,397 times
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Well, depends on how marginal you are.

Banks, after all, are in the business of lending money. They don't make money just sitting on a big pile of cash.

That being said, the days of rubber stamping any application that came through the underwriting department are over. Because I guarantee you that the Federal Research will insist on a lot more loan documentation, and probably hold banks responsible for bad paper that gets sold to investors.

So they'll scrutinize you more thoroughly, they'll go everything in your credit history with a fine-toothed comb, and they'll be a lot quicker to say no.

But right now, they're really gun shy and basically waiting for the new paradigm in the market to take effect. So for the next couple of months, I wouldn't count on it.
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Old 09-15-2008, 04:33 PM
 
Location: Great State of Texas
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The money is NOT going to flow fast and furious like it has in the past.
Be prepared for very tight lending rules.
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Old 09-15-2008, 04:39 PM
 
Location: Broward County
2,518 posts, read 9,714,935 times
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they are ALREADY TIGHT...read my original post. I know that...most people know that. Do you think LEHMAN going under is going to cause even more tightening ? And where do you think mortgage interest rates are headed ?
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Old 09-15-2008, 05:07 PM
 
Location: Earth
1,442 posts, read 3,578,587 times
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I lending gets even tighter, look for real estate prices to fall even more...?

I'll be living this nightmare in the Spring when I put my place on the market after 11yrs.

I guess the good part of all this is that it will weed out most of the idiot 'house flippers' that played a big part in all driving all of this nonsense.

How are those 'red hot' Cali and Vegas markets doing these days, anyway??
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Old 09-15-2008, 05:35 PM
 
Location: In my playhouse.
1,047 posts, read 2,463,694 times
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Quote:
Originally Posted by heydade View Post
they are ALREADY TIGHT...read my original post. I know that...most people know that. Do you think LEHMAN going under is going to cause even more tightening ? And where do you think mortgage interest rates are headed ?
Lehman going under and everything else happening lately IS going to cause more tightening - how could it not?

Interest rates are headed up - can't help it. Bad news for any type of borrowing - good news "maybe" for cash/savings.
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Old 09-15-2008, 09:32 PM
 
Location: Cary, NC
1,036 posts, read 3,634,256 times
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Actually, I dont think the Lehman failure will affect guidelines much. It won't help them, but it likely won't hurt them any.

What is going on with Fannie Mae/Freddie Mac and potentially WAMU will affect mortgage lending... but the products and loan types that Lehman (through Aurora and other divisions) offered have been gone for a while. Its all really prime or government now and while Lehman will cause some fear it is unlikely to cause much change.

Rates have actually come down a bit on conforming rates as investors view them as "safer" now that the government is backing them. How long that will last is another question. One view is that the government did make them "safer", another take though is that the government just became "riskier" by taking on a huge liability that is likely to experience serious losses.
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Old 09-15-2008, 09:48 PM
 
Location: Los Angeles Area
3,306 posts, read 3,336,563 times
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The collapse of the shadow banking system will effect fund availability which in turn should change lending standards due to a reduction in available funds.

Quote:
Its all really prime or government now and while Lehman will cause some fear it is unlikely to cause much change.
Yeah, not to much change just the collapse of the modern financial system.
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Old 09-15-2008, 10:26 PM
 
Location: near Portland, Oregon
472 posts, read 1,527,763 times
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Quote:
Originally Posted by rcarrillo View Post
...another take though is that the government just became "riskier" by taking on a huge liability that is likely to experience serious losses.
And what the heck are we to invest in if even T-bills and notes go junk?
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Old 09-16-2008, 11:43 AM
 
Location: Cary, NC
1,036 posts, read 3,634,256 times
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Quote:
Originally Posted by scone View Post
And what the heck are we to invest in if even T-bills and notes go junk?

If T-bills go to junk you don't have to worry about investing. You will just have to worry about buying bread, water, gas. There won't be much use for dollar bills at that point.
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