As you know companies like American Home Mortgage, Argent Mortgage and many small mortgage brokers have closed their doors these past few weeks. Recently another huge source that funded many loans Magnus Finance , including Charter Funding…stopped funding loans…here is how that is effecting all of us…

…all of these mortgage loans that had been with these sources…have been moved to the remaining sources. All of the sub prime loans are trying to get funded through by switching them to FHA/HUD loans. These loans are slowing down the pipeline and causing the underwriters to get even more stringent on their approvals. So far all of the manually underwritten loans are not getting approved. The lenders only want computer approved loans through Desktop Underwriting and Loan Processor systems of FNMA,GNMA and FREDDIE MAC.

What this means to you and your agents clients-Expect to see closings be slowed down tremendously. There are too many loans being pushed through less outlets.

Countrywide ,Citi Bank and many other large lenders went to the Fed for a bail out. Programs we had earmarked for clients last week no longer exist with the large lenders causing us to come up with alternatives through small brokerages.

Recommendations-Check your mortgage pipeline and clients financing. Banks and credit unions are the best choice for squeaky clean clients with large down payments. Clients with less monies down and spotty credit do have a place to be funded as of today…brokers have lists of lenders that are still funding and can switch them when notified daily of who is funding and who is no longer funding.

Expect to move your closing dates. That backlog of loans being underwritten right now make it impossible to guesstimate or push through favors anymore.

Help your lenders get what they need from your clients. No one has ever seen a market like this since 1983. Not many professionals have been in the business this long so they do not understand. I have seen this twice before in the 23 years I have been originating loans.

Clients do not understand the urgency. We want to keep them calm in this process but we need them to understand the importance of getting everything they need in as soon as possible. It is hard for those that are not in the profession to phanthom this type of market fluctuations daily.

For example….Chase Mortgage received 9000 loans this month! If your clients have an approval encourge them to get all of their conditions in so that they can get in line to schedule a closing.

Keep coming back to www.sellmyhouse.com for updates on the most recent mortgage news. The direct link can be found here.