I work for a bank, I'm a loan officer. This year we went from 580 minimum Fico for Government loans (VA/FHA) to 620, then to 640, soon to be 660. Appraisals now have to go through an HVCC system (on conventional loans) that are holding up closings, reducing values and costing buyers more. FHA just annouced today guideline changes that will essentially put most brokers out of business January 1st 2010, Taylor Bean & Whitaker, previously the 4th largest Ginnie Mae servicer and most lenient lender (privately held company) got taken over by the feds and shut down in July. The $8000.00 tax credit for 1st time homebuyers (which essentially became a way to go FHA with no down payment) ends October 31st. And....as mentioned above, FHA is going to either need a bailout themselves or they will dramatically increase the fees to do an FHA loan. The fed buy back of Treasuries and Mortgage backed securites ends the end of November (unless one or both programs are extended, we'll probably know next fed meeting).
Folks, the bubble was all about giving a loan to anyone who had a pulse. That credit is long, long gone, and IMO getting harder to get. No more easy money. 49% of the USA has a credit score below 669. I am guessing (based on actual sales experience this year) that a good 1/3 of all people who could buy a home two years ago are now toast. That doesn't even include people who are now unemployed and without work or who just recently go re-employed (2 years work history now, no gaps for a house loan). The housing market has further to fall and will not bounce back to prior levels for a long, long time. Sorry everyone. Sorry.
Saturday, September 19, 2009
"Most brokers out of business January 1st 2010"
Interesting comments left by a reader on a recent MarketWatch.com article: