Lending Guidelines Continue to Tighten
It seems like a day doesn’t go by lately that we here at The Mortgage Guide don’t get an urgent message from our wholesale lending partners. Today it comes from Express Capital Lending.
Important Announcement - Effective Immediately
Due to current market conditions, Express Capital Lending will only be accepting new submissions for agency conforming loans (Max Loan Amount $417,000). We appreciate your business, and we will notify everyone when circumstances change.
‘Jumbo Loans’ and the higher risk that they pass on to the lender are no longer available from Express Capital Lending’s wholesale division. This is a big change, but it’s hardly one of the biggest we’ve seen lately and it certainly won’t be the last.
Last week we received this missive from Provident Funding:
Interest Only Changes 8/14/2007
In response to the federal banking agencies’ Interagency Guidance on Nontraditional Mortgage Product Risks (Guidance), Freddie Mac has modified Loan Prospector to require the qualification of Interest Only Mortgages with Fully Indexed, Principal and Interest payment.
Effective 8/14/07, Provident Funding will require that all Borrowers utilizing an Interest Only Loan program through Loan Prospector and Assetwise be qualified with the Fully Indexed, Principal and Interest payment.
All Interest Only loans locked prior to today (8/14/07) will be permitted to qualify with the interest only payment, but must fund prior to the lock expiration date.
This change didn’t affect us as we always qualify people at the fully indexed or ‘note’ rate. However the frequent changes that are going on in the mortgage industry, not to mention companies going belly up, make it prudent to google your lender if you are closing on a purchase. Many borrowers are left hanging at closing only to find out they don’t have a loan and losing their earnest deposit. Be smart, google your lender.
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