Loan requirements become even stricter today

Posted by admin

March 21, 2008

More bad news in today’s paper for the Real Estate and Mortgage industry. The Sun-Sentinel has an article in today’s paper saying that Mortgage insurers have already flagged nearly a quarter of the nation’s ZIP codes where they refuse to insure some home loans. These types of loans that are being flagged and black listed are: Those for investment properties or second homes, those with riskier adjustable-rate or interest-only mortgages, or for buyers making down payments of less than 3percent.

“Lenders’ changes have removed 30 percent to 40 percent of the borrowers who could have qualified in recent years, estimated Tom LaMalfa, managing director at Wholesale Access, a Columbia, Md.-based mortgage research firm.”

Private Mortgage Insurance – is insurance for the lender in case the mortgagor is not able to repay the loan. Without it the lender is not able to recover its costs after foreclosing the loan and selling the mortgaged property.

You can read more of this article here.

Mortgage/Finance News