call your lender and make sure that your mortgage has indeed been sold. Until you get a letter from both lenders advising that your loan has been sold (or assigned), you should continue to pay the first lender. This is a problem now that so many banks and lenders are having to close their doors, but also opens up the door for new scammers to try and collect mortage payments from the unsuspecting homeowner.
When in doubt, make the call!
In April of 1973, mortgage rates were about the same as they are today. Since that time, we have only had mortgage rates this low during 2001 and 2002, the height of the seller’s markets where there was little inventory.
In the last two major buyer’s markets, one in the early 1980s and the other in the early 1990s, the rates were much higher. In 1994, interest rates were at 9.5 percent, (and they were at 18 to 21 percent in 1980). In the early 1990s, the rates were hovering in the 11 to 12 percent range. Thus, today’s buyer’s market, with exceptionally low mortgage rates plus a substantial supply of inventory, is the best time in decades to purchase. Source: Imman News
In this ever changing lending environment, realtors will need to keep a few key things in mind:
Pre-approvals
Be sure your buyers update their pre-approval letters every 2 weeks. Loan program changes and rising rates may negatively affect how much they can buy.
Property
As lenders face loses to foreclosures, they are focusing more on the condition of the property, as well as, the comparable sales to support value.
Government loans such as VA and FHA have strict guidelines for wells, septic and overall condition of the home. No deferred maintenance such as peeling paint, missing railings, etc.
Foreclosed properties will need to have the utilities on, and all appliances.
Appraisal underwriters are taking more time reviewing appraisals. A few months ago, a report passed through underwriting in 2 days, it can now take 2 weeks!
Stay Positive
Remind yourself and your clients that we are not in a crisis. Lenders are just taking more time to make sure people can afford the home they are purchasing.
Allow at least 45 days for a loan to close to minimize stress.
My sources tell me that as of May 1st. VHFA will no longer offer 100% financing. I am not sure how that will affect loans currently in the pipeline that are scheduled to close after May 1st.
Good news..I can still get 100% financing through Coldwell Banker Mortgage with a 3% gift from the seller and the rate is the same or less than VHFA (depending on credit). Credit scores can be as low as 580!
I got this email from one of my lenders recently and thought it worth sharing.
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Hello Ms. Nadeau,
I noticed that you had a price reduction on a condo in Colonial Condos. I wanted to send you this note to share with your buyers about the “danger” of waiting for home prices to fall.
This winter, many lenders have had to tighten their guidelines. This, with rising rates, has hurt many prospective buyers who were waiting for homes to become “more affordable.”
For example:
2 bd, 1/2 ba Condo listed on 1/26 for $172,500
Conventional Loan options available on 1/26
0% down, rate of 6.50% = $1092/mo
3% down, rate of 5.75% = $977/mo
5% down, rate of 5.5% = $931/mo
Price reduced on 3/11 to $169,000
Conventional Loan options available on 3/11
0% down…..NOT AVAILABLE
3% down, rate of 6.25% = $1010/mo
5% down, rate of 5.875% = $950 / mo
As your mortgage Advisor, I beg you to get the word out….”BUY NOW”
Sue Ryan
Coldwell Banker Mortgage
802-318-0823
With the latest “Bear Stearns” collapse, many loan programs have been discontinued. Lending Guidelines are going “back to the basics”.
Gone are the days of lax lending rules….
