August 24th, 2007 8:22 AM

Dear Friends,

The past few weeks has created a multitude of problems for everyone concerned in the mortgage business.

Whether you are seeking to Purchase or Refinance a home, numerous lending guidelines have changed dramatically due to the continued collapse of "Sub-Prime" mortgages.

Truthfully, many in the industry looked the other way in regards to qualifying clients in mortgages where 'negative amortization' and 'interest only' were terms and programs misunderstood by many.

Moreover, the zeal to help first time homebuyers in their quest for 100% financing options - where NO assets nor verifiable income was required to purchase a home -

these actions have created ultimate consequences in record FORECLOSURES and the depression of property values throughout the country.

Many lenders and investors are NO LONGER willing or capable of providing financing for borrowers seeking the loans which created the problems we are currently facing today.

Due to these circumstances, the turmoil and the tightening of credit by financial institutions has begun in earnest.

The following loan programs are being re-worked with stricter requirements or eliminated entirely:

1. Second Trust Deeds & HELOC'S or Home Equity Lines Of Credit are no longer offered by many companies and/or major restrictions to guidelines has affected the viability of this product

2. "Stated Income" or "No Income - No Asset" loans where Tax Returns or Proof of Income is not provided. It has been reported many lenders will NO longer provide this type of financing

3. Non-Conforming products - where loan amounts are over $417,000

4. Investment loans - Non Owner Occupied Financing

5. 100% Financing - Stricter guidelines and higher middle FICO scores are now required if offered

6. Lower Loan To Value Ratios

7. Lower Debt Ratios

8. Additional Cash Reserves where a potential buyer must have at least 3 to 4 months mortgage payments and/or stated gross income in savings for at least a 60 day period

9. Additional appraisal may be required for loan amounts over $1,000,000 due to lower values

10. Option Arm financing has been curtailed or eliminated entirely by some institutions

11. "Jumbo Loans" or financing over $417,000 are now being priced HIGHER in RATE & in FEES. Some lenders are no longer providing them

These are just a 'few' of the Draconian measures instituted to help solve the consequences created by the Sub-Prime mortgage fallout.

Unfortunately, the eagerness to enact these measures as 'solutions' in some respects, may cause more harm than good.

The mortgage industry must take a BALANCED approach in order to rectify this problem.

To this end, our company,


will do its part in continuing to EDUCATE our clients by providing the GUIDANCE required to make an INTELLIGENT decision in securing a MORTGAGE tailored to the SPECIFIC needs required & requested.

MONEYTEAM has been through these upheavals in the financial markets before. In a few months many of the loan products that are no longer viable will be resurrected again in a different form.

MONEYTEAM will be updating our RATES and LOAN PROGRAMS to conform to the current mortgage marketplace.

Please check our TEAMBLOG on MONDAY, AUGUST 27TH for additional plans we are instituting to streamline the selection process of the loan programs we are offering.

Thanks Again

"Team Players In Real Estate Financing Since 1989."




Posted in:General
Posted by Jesse Dorado on August 24th, 2007 8:22 AMPost a Comment

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