Guess this thread isn’t going to drift to the bottom anytime soon…
Allan from Fallbrook:
From the inside, last Friday was a bomb on the business. With the closing of American Home Mortgage, it spooked all the other lenders, that Friday was nothing but constant guideline changes and programs getting yanked. A good friend of mine was a corporate trainer, I called him on Tuesday and he sounded hopeful that IndyMac might buy them, but I didn’t have it in me to tell him that it probably won’t happen on such short notice. I post and read on a mortgage broker forum and from some of the threads on there it was a whine and cheese fest. Jumbo rates went up .75 to 1.5 depending on the documentation. Across the board, any non-conforming loan went up dramatically. I’ll give you an example, I have a client that’s purchasing a duplex, credit is a little shaky, has a nice sizeable down payment, stated documentation, and his rate with a particular lender went from 8.5 to 10.5 within one day. That’s crazy, it’s turned the alt-a business on its’ head.
The wall street guys see the volume of deals getting pulled and figure no biggie, the smarter ones are the ones connecting the dots. It’s a domino effect, that hasn’t drifted down to the market yet. Buyers in escrow that didn’t have locks on their loans got screwed, sellers that need to sell because they’re in escrow for another place got screwed, homeowners that purchased within the past 3 years on anything but a fixed rate mortgage got screwed, and so forth, you get the idea. It’s put a crimp on the business, but most don’t realize it because they haven’t felt it.
As for the business, the refi business is done, subprime and now alt-a is in the crapper, they’re still around, but not in the same fashion as they were before, which leaves conforming loans, first time homebuyers, and homeowners getting 2nd mtgs.. I have several other friends that are brokers in different areas and it’s the same with them. One of them is focusing on Helocs and stand alone seconds, while another is scrambling and worried since he can’t sell his loans on the secondary market that he funded with his warehouse lines. Brokers that had a gangbuster month in July that funded on their warehouse lines are probably going to be out of business soon. As for me personally, surprisingly I’m alright. The buyers I have, have solid down payments and credit. Some are first time buyers, others aren’t so and are buying due to changes in lifestyle (kids, divorce, the usual). Maybe because I’m old school, underpromise and overdeliver, go out of my way to make sure the client can stay in the house long term, have good working relationships with my realtors, have clients that don’t want me dead or wish I was in hell, don’t ride my appraisers for value, and whatever else. Me and karma are old friends and I don’t like pissing her off. I do what I feel is the right thing to do.
Snail:
Was I talking to you directly, if you didn’t post, then it doesn’t apply to you does it? Or do you see yourself as the all encompassing forum? Great attention to detail, but you conveniently missed this “ I get calls from client referrals of people like her in the same exact financial position. Stuck, can’t rent, can’t sell, can’t refi” which makes me a stock broker??? Geography class called genius, says it wants you to teach it.
