The rate of GFE ridiculous?

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Friend of a credit score of 648,622 and 621st No late payments of nearly 4 years. Lines of credit have a car, and two others after the revolving credit card. average score of 634, but fell because many applications are looking for a mortgage. DTI around 30%. But they are listed on the GFE 90% LTV 10% and 95% to 11% LTV. With the way the market is today, and lenders are tightening standards for borrowers and squeezing the score. What soovitate1. Take the address before you can refinance the loan, and later, after your score increases jätkuvalt.2. Take the opportunity to find another lender (which may be impossible today turul.3. Expect it. But he left his rental townhome has 2 years to 15 september.Samuti I forgot to add it becomes Alt-a loan, because they use their income and bankstaements his rent check is canceled checks lanlord documentation, such as late payments arrears qulificationLihtsalt thought I might add bankstatements your income is $ 61,507 divided by 12 is approximately $ 5,000 per month. And the rent payable $ 1,360.00 per month plus all utilities. $ 181.900 house price less the $ 500 deposit, 3% sellers concession for closing costs and 5% deposit.
Does anyone have an idea of the impact that the bankruptcy AHM, and what effect it has on the market as a whole? Countrywide issued a statement last night, and said they made offers to loan alt. They do not buy these loans and they do not offer. No niche products being offered. Do you think that many lenders will create a political change in the light of this situation? I totally agree they should not have started with these loans. That’s why so many homeowners are foreclosed on a half years, and others have difficulty making their mortgage payments.

  1. Reply
    Mary B
    January 22, 2011 at 1:14 am

    The credit scores are too low…that is why the rates are so high.

    They are using his bank statements as income, because evidently he must work at a job where he can’t prove enough income to qualify for the loan…that is a common “fix”, but you’ll pay through the nose in an interest rate for it.

  2. Reply
    Casey C
    January 22, 2011 at 1:49 am

    Subprime is the only division that uses bank statements at this point. At 90% ltv, my rates would probably be around9% but you’d have to pay a couple of points. 95% is probably the same, but there’ s a good chance if you can use bank statements I could go 100%.

  3. Reply
    January 22, 2011 at 2:00 am

    The rate is higher as it sounds like they are doing one loan to finance this property. Any loan over 80% LTV would result in a higher interest rate if there was not a second loan added on the property. I would shop around (with a mortgage broker) an office that deals with several different lenders instead of a mortgage banker ( in house lender like Washington Mutual, Wells Fargo, etc.).

    Another thing to remember: Most likely this loan will have a pre-payment penalty (an extra fee if the loan is paid off early) ask the loan officer about that. When signing loan documents always look at the promissory note (it will be under if you pay the loan off early – it will list the term and cost to pay it off early). The pre-payment penalty is generally 6 months worth of interest payments.

  4. Reply
    January 22, 2011 at 2:49 am

    The Alt-A market has all but evaporated in the last few weeks and there are very few lenders offering the program at any rate.

    Why does he need to use bank statements for his income documentation?

  5. Reply
    January 22, 2011 at 3:35 am

    The scores aren’t really the problem. It’s his inability to document enough income to make the payments using traditional methods, like W-2’s and tax returns.

    If you took his taxable income, what would his DTI be? If it’s under 65%, he can probably get a Fannie Mae loan right now. Seriously.

  6. Reply
    P J
    January 22, 2011 at 3:37 am

    Lenders have already changed policy. They should never have made many of these loans to begin with to people who were way over their heads before the first payment was due. But they wanted then then and now and now they are losing those homes.

  7. Reply
    Mary B
    January 22, 2011 at 4:35 am

    American Home isn’t the only one…Wells Fargo has already shut down their entire subprime wholesale division, and right now I am having a very, very difficult time in keeping up with guidelines because they are literally changing every day, and sometimes, several times a day.

    Equifirst Corporation, was the most profitable branch of Regions Bank…and they sold it off…they were 100% wholesale subprime.

    I have never seen anything like it…but this is what unethical companies get when they write bad loans to people with no way to pay them…..they may go well for so long but then they will be out of a job.

  8. Reply
    January 22, 2011 at 4:35 am

    This kind of fiasco happens periodically. Easy credit pumps up sales, but to continue selling, and to continue offering new loans, loans must be offered to people less able to pay them back. When a slight economic slump occurs, people at the edge default, bad loans have to be written off, and companies that overextended by offering risky loans go broke if enough of these loans go bad. Depending on how much in the way of paper value vanishes, the larger economy may or may not be depressed by the sudden drop in apparent wealth.
    Whenever a bad loan surge occurs, lenders tighten up criteria for loans, loans become less available, housing sales slump, new home construction slumps, some people are put out of work, etc.

  9. Reply
    ed m
    January 22, 2011 at 5:21 am

    this will effect all of the hosing industry from the supplies like home depot to the construction companies building new homes to the mortgage companies — all i can say is american tight in your belts and get set for a rough ride.

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