It is a little scary right now. Hold on tight. The strong will survive.

I agree Mortgage-Master it is a phase, the we are going through and that we have already gone through in the past.

Great posts! How in the world does someone who is young, newly married just starting out every buy a home? Sometimes I'm grateful I'm hitting 50 this year! :-)

Wanna hear something kind of funny? Flagstar Bank, probably my new favorite, has just opened a subprime division. I was talking with the AE and he said that the rates aern't sexy, but they are still doing some of the riskier credit stuff. Just an FYI.

There are still plenty of banks doing sub-prime. A few that couldn't handle it shut down, some re-structured and others became new players in the game. Everyone will get through this, yes, there will be foreclosures, and a lot of people trying to refinance before they get in trouble, and a lot of people that want to refinance but can't because their homes are appraising lower than in 2005, but there are always customer and lenders. Everyone should try to keep the credit scores around 640-660 and there shouldn't be any problems as long as they make enough. There are still lenders that do stated income, although on some they only do it for people that are self employed.

These are interesting times & as a seller, I've been totally caught up in it. At the end of January, I accepted an offer on my home. I was asking $299k, they offered $303k with me paying $8k towards closing costs (net $295k purchase price). It's April 6th & we still haven't closed. It's a 100% finance. The commitment date was extended 3 or 4 times. Through some digging & phone calls (the agents & attorneys involved are not the greatest), I was finally able to get a copy of the "commitment letter" dated 3/28. The Buyer is married, but the wife is the only one going for the loan (my agent believes the husband is an illegal citizen). The commitment letter, which looks more like a preapproval (although my agent said she was preapproved when they made the offer in January), approves the Buyer for a $300k loan at a 9.425% rate for years after paying 2.5% in points. By the way, the home only appraised at $300k, so an amendment to the contract was drawn up stating purchase price of $300k with seller paying $5k towards closing costs. The loan is contingent upon the Buyer providing verification of employment, social security number, deposit of funds to close, etc. in addition to the other items that are normally listed as contingent items for a true commitment letter (clear title & HO insurance). I believe that what has happened is the woman, who was supposedly preapproved with Remi Capital in Union City, NJ which caters to the Hispanic community, got caught up in this new legilsation being brought on to protect buyers from predatory lenders. I spoke to the manager of Remi & he said that the closing had to be delayed (several times) because the underwriter at Remi was afraid of losing his license & so he was going through all of the documentation with a fine-tooth comb checking & rechecking her information. I still do not have a closing date. I'm stuck in limbo because my attorney didn't put a "time is of the essence" clause into the contract & in the State of CT, the Buyer is allowed a "reasonable time" (30 days) after last written closing to get a mortgage & the seller can do nothing. The last I heard, the mortgage broker went on vacation, but the underwriter did call the buyer's attorney a couple of days ago looking for the title and wire transfer instructions - a ray of hope - but, I'm not holding my breath.

I would demand to see something from the underwriter, typically mortgage originators will get a list of conditions from the underwriter which will tell you what items are left. If any major items are still needed (proof of income, assets etc) I would try to get out of the deal as you may be losing potential buyers.

Commitments are basically worthless because there have been lenders that have actually closed a loan "The ultimate commitment" and failed to fund (see ownit, new century, etc)

There are always weasel clauses on commitments (eg. Underwriting QC, No material change in customer circumstance etc.)

Good news - Title and wire transfer instructions are usually positive. (although many companies order this stuff very early in the process) I would ask the attorney who the mortgagee for the title insurance is and if it has changed from the initial request (this could be a sign that the broker is still looking for a suitable company)

Hope this helps
Danny

Well here is the latest in the Lender fallout since the first of the year.

http://ml-implode.com/

some names you will recognize and most you wont as they were primarily regional lenders. There are alot of good harworking people without jobs, and not many places for them to turn in thier industry. Good Luck to all who have been in the biz!

With the Sub-Prime fall out, we have been very busy. We keep our brokers in the know with our FREE Broker Program.. Our brokers are enjoying 5-10 clients becoming loan-worthy in the first 45 days of service. http://convertturndowns.com