kevin
Member
Cash: $ 4.75
Posts: 21
Joined: 05 Jul 2005
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| 2007 Mortgage Updates |
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The beginning of 2007 started with high interest rates where the average 30 Year Fixed was around 6.375%, whereas many thought the Fed were to drop prime down to 8%. But nevertheless, prime still remains at 8.25% and rates loom over 6%.
Another surprise in 2007, is the fallout of 3 Sub-prime Banks: Mortgage Lenders Network, Ownit Mortgage, and Resmae. This also doesn't include Secured Funding, who had a tremendous portfolio in 2nd mortgages. How has this affected the current market? It feels as if other banks has tightened their underwriting guidelines where 100% financing remains easily accessible for those who have a 640+. Unfortunately a year ago, a person with a 600 FICO could easily obtain 100% financing as well. It still is possible but not as accessible as before. Another factor that doesn't help the market, is that investors are straying away from the secondary financing. Banks such as Freemont, have heavily cut back from doing 80/20 combo loans.
As a result, rates on 2nd mortgages have increased and the guidelines are more strict. This causes a flux in limiting 100% financing to those who have poor-fair credit scores. As a result many people with 600-620 FICO scores are only limited in obtaining 1 loan with a rate of 10-12% for 100% financing. Also those who have a 700+ FICO score are feeling the increased rates as a result of the cutbacks of 100% loans.
It seems like there is a tradeoff: taking advantage of the low/current housing market for the increased rates in 100% financing.
Kevin
klu@nationwidemortgage.net
Nationwide Mortgage
Toll free: (805)267-6307
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