Sub Prime May For Sure Be Dead
Posted by admin under: Main Dec 16I have been on the record for despising the sub prime product. Even more I have despised that so many people qualified for FHA insured loans but were sold subprime by greedy lenders, or lenders that were not FHA approved.
The counter point to those of us in this camp, is that in some cases it was a blessing. Example Here:
Irregardless of good or bad for people, sub prime may be dead.
How so? From an AP press release we see the following details.
Federal Reserve Officials Plan Steps to Crack Down on Shady Mortgage Lending Practices. The Fed is considering: barring prepayment penalties. That would be the end of sub prime. The fees the lenders pay up front are so high the lenders – investors must not have the loan paid off early to recapture those fees. If you want sub-prime to go away, pass this one.
Point: Many many borrowers are able to qualify for decent rates in 1 year. I used to persuade them to wait a year. It was the best solution for most, until we had this historic run up in values. I think we are back to where this will be the best option for borrowers, soon, maybe the only option.
The rules changes propose sub prime borrowers be required to have an escrow account for their taxes and insurance. I never understood why sub prime lenders waived this.
Another change would eliminate stated income loans. My oh my, there goes the liars loan. The counterpoint to this, loan officers could sleep better at night. I say this because the minute the borrower is confronted they claim the devil loan officer made me do it.
They also plan on curtailing advertising claims. For me, for my tender ears, I would vote for no radio advertising by mortgage companies. The fall in the, “oh please don’t make me vomit category.”
Source: Sub Prime May For Sure Be Dead
Sunday, December 16th, 2007 at 1:28 pm and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.