Changing Underwriting Guidelines

Just because your favorite lender did a non-owner occupied, 90% loan-to-value, stated-income loan for you yesterday, doesn’t mean they’ll do it for you today. Loans that were easily underwritten before are now under scrutiny. Lenders are just not underwriting what they used to. And, they are stopping your loans in their tracks.

Underwriters have good reason for being so cautious. “318,355 properties entered some stage of foreclosure nationwide during the third quarter of 2006, a 17 percent increase from the previous quarter and a 43 percent yearly increase from the third quarter of 2005,” according to Realty Trac’s (Irvine, CA) Q3 2006 U.S. Foreclosure Market Report.

In an effort to better manage loan portfolio losses, many non-prime and Alt-A lenders and investors are changing their underwriting guidelines without giving any notice. When weighing the possibility of declining property values with increasing foreclosure rates, can you blame them? As an experienced loan professional be prepared for more loan guideline changes, stricter policies and possibly higher rates as lenders and investors try to adjust for mortgage losses.

50-year mortgage. It’s here.

First came the 40-year. Now, it’s the 50-year. Statewide Bancorp is now offering a 50-year mortgage. The advantage is lower monthly payments, but it will take quite a long time for borrowers to build equity with this loan. Stay tuned. 60-year mortgage may be right around the corner.

At Informative Research, we're constantly developing new tools and technologies to help you close more loans. For account status and new product information, contact your Informative Research representative today, or call us at (800) 473-4633.

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