Washington State Mortgage Blog

As sellers continue to drop their sales price, many times there is just no further room for the seller to pay for some of the buyer's closing costs. Buyers are left to either negotiate a higher price to have the seller work in the costs, or use a higher interest rate to have the lender pay some of the costs.

A new loan product now offers a 95% first mortgage with an 8% second mortgage that allows the buyer to finance 3% of the closing costs into the new loan. The first mortgage is a standard conventional loan. This is a great loan to use when there is just NO more room to negotiate with the seller. Call us at (253) 536-5626 for details about this innovative and greatly needed loan program.

CLICK HERE to begin your free preapproval.

With the signing of the new housing bill, HUD is trying to put an end to the use of Down Payment Assistance programs from non-profit organizations. The scheduled end date is October 1st, but lenders are already stating they will not accept new applications after September 1st to make sure the loans in the pipeline are closed before the end date. Buyers wanting to negotiate this type of loan with the seller had better hurry.

There are attempts to push a bill through that would make HUD back off of this, but it may not get through in time or be successful. HUD has wanted to cancel this for a long time.

You can still get 100% financing with a USRD loan and we are direct lenders for that product. Income limitations do apply and property eligibility is a factor also, so you should get preapproved for this loan before househunting. CLICK HERE to get started.

The purpose of this blog message is not to alarm you but to alert you to drastic and irreversible changes currently taking place in the mortgage market. If you or anyone else you know will need mortgage financing in the next 18 months, you need to read this!

Just last week, American Home Mortgage and its wholesale counterpart, American Brokers Conduit, became the latest casualties of the credit crisis. Last year, this company closed over $58 billion in home loans. Despite being, by all accounts, a wellrun business, market conditions forced them to file for bankruptcy, leaving billions of dollars in loans in their pipeline unable to close. Tens of thousands of borrowers have now been left without financing as a result of companies like this going under.

Additionally, as of today’s date, First Magnus has stopped doing loans, and it is rumored that a liquidity crunch at Countrywide is causing an adverse action in their stock price as they infuse their reserves with $11.5 billion from a 40 bank consortium causing Merrill Lynch to downgrade them to nearly “junk bond” status.

Clearly, with over 100 national lenders having now closed shop in the last eight months, this is no longer simply a subprime lending issue. The credit market is experiencing unprecedented turmoil. According to Federal Reserve Chairman, Ben Bernanke, "Financial markets have been volatile in recent weeks, credit conditions have become tighter for some households and businesses, and the housing correction is ongoing."

What does this mean to consumers?

Potential borrowers cannot wait any longer. For those who are considering buying a home, be aware that the volatile credit market can change overnight, leaving fewer options available to borrowers attempting to qualify for a mortgage. This is even more true for those looking to refinance. With decreases in home values and fewer available mortgage instruments, delaying any longer could get significantly more expensive.

Borrowers with applications in process must not delay. Applicants should work with their mortgage professional to complete all paperwork quickly, especially on nonconforming, stated-income, and stated-asset loans. Even minor delays can result in funds being yanked at the closing table!

Sellers can no longer be reluctant to accept offers or reduce prices. Tightening credit and diminishing mortgage products will continue to reduce the pool of qualified buyers. This, along with the increase in national housing inventories, means now is not the time to hold out for the "best" price possible.

Buyers with credit issues or who have difficulty providing required documentation can no longer sit on the fence. If market conditions change, buyers who qualify for a loan today may not qualify a few weeks from now for the same exact loan. Just this week, many lenders have stopped offering No-Doc loans, and some lenders have even pulled back on all forms of stated loans. As market conditions continue to change, a buyer's pre-approval status can disappear even more quickly, delaying or spoiling the deal. Get started now by CLICKING HERE.

Subprime and Alt-A refi candidates, especially those with ARMs scheduled to reset over the next 12 months, need to act now - even those with a pre-payment penalty. ARMs borrowers struggling with monthly payments now might be shocked to know that monthly payments can double in some cases once an ARM resets.

What does this mean to you? If you or someone you know has an ongoing real estate transaction, I would be glad to help. Please call me right away. As an educated mortgage professional, I will utilize my experience and resources to help you and your loved ones to navigate through these turbulent times. Don't leave your future in the hands of some random mortgage provider. I'm local, accountable, and you can trust that I'll do everything in my power to help you succeed.

With the recent collapse of the subprime mortgage market, many of the former "zero down" or 100% financing products went away, especially if you could not document your income or had some credit issues.

You have nothing to worry about if you have kept good credit and can document your income. Besides the 100% financing available through the VA, USRD, Fannie 100, and Freddie 100 programs, there are still other ways an experienced mortgage advisor can work up a suitable loan program.

I invite you to ask questions about financing a real estate loans here in this blog. New articles will be posted every 3-4 days.