The politicians, talking heads, and NAR pitchmen think that tight credit is to blame for a lackluster housing recovery, but those of us on the street know the local market has been red hot with demand. The strict underwriting is more of an annoyance that anything, with underwriters requesting every document they can imagine in order to minimize the threat of buybacks.
Has it loosened up? Will low rates and looser credit spearhead another big year in 2015? I think so.
Here is an excerpt from this article to demonstrate the loosening:
http://www.mortgagenewsdaily.com/channels/pipelinepress/12122014-super-liens-respa-tila.aspx
Let’s see what some random companies, small and big, have been up to lately to gauge lending trends.
Banc Home Loans has expanded its Jumbo guidelines. Its “Program 55” highlights include up to 85% LTV no MI (to $2M), Loan amounts to $5 million, Minimum 660 FICO to $1.5M, 1st time home buyer- loan amounts to $2M, and Primary Residence: Cash Out Refinance now to 75% LTV (Cash-out up to $1 million).
Caliber’s enhanced Fresh Start Program was rolled out. The two biggest features are bank statement option for self-employed borrowers, and no seasoning or mortgage payment history required for Short Sale, DIL, Foreclosure or Bankruptcy.
BluePoint Mortgage has Jumbo IO products with 89% LTV up to $1,500,000 with NO MI Loans up to $3,000,000 and 80% IO to $2,000,000, Up to $500,000 Cash Out, Second Home and NOO options, Cash out for second homes and NOO.
Carrington Mortgage Services, LLC announced the national availability of “The Carrington Loan,” offering borrowers a more transparent, simplified home loan process with no closing costs or upfront financing fees. The Carrington Loan can facilitate home purchases for borrowers in the sub-640 FICO score range.
Wells Fargo Funding improved its refinance adjusters for all non-conforming products as of November 10th, adjuster improvements are listed on the daily rate sheets. In addition, its minimum down payment requirement has been removed from its conventional conforming loans.
Stearns Wholesale is now offering new FHA FICO options 600-619 FICO score program.
Next year should bring in more demand from those who have been shut out previously from getting a mortgage, and those types aren’t known for patient decision-making. It might feel more like 2006 all over again?
So, this means that home prices will climb even higher!?
Beam my up, Scotty!
‘Think so.
There is a predictability factor. Those who are selling next year can pick their poison:
1. Sell in the first half, and know what you’re going to get, or
2. Plan to sell in the second half, and not know what you’re going to get.
All that “background” they collect has a secondary value for data miners. During a less recent ordeal I was asked for the fourth time for a copy of the -entire- insurance policy extant for the property we were buying out of an estate. A note from the insuring agency with policy number and period of coverage is all they “need.” Everything about the current owners is what they are trying to glean.
as long as they don’t go to “No-doc’s-No Down” loans I think we will not see what we saw last time.
Doc’s OK
Down OK
No Doc or Down, not OK
Agreed.
These terms might sound a little looser but still reserved strictly for those who qualify and endure the underwriting torture.
no doc loans were not the problem. the problem was the collateral behind the loan had a bogus value. If people actually knew value the prices wouldn’t have gone up to the moon. you cant control greed. No doc loans are great for some folks. maybe collect a little down payment from them?
I always chuckle a little at the notion of underwriting torture. Think if you were lending your money, how would you do it? If some stranger walked up to me and asked for a half million dollars, I assure you I would put on the elbow-length latex gloves to make sure the exam didn’t miss anything. Being self employed with rental properties, if I apply for a refi or new loan, I know I won’t walk right for at least a week. Just part of the deal.