Research lenders on any offer – BIG TIME!!
Monday, March 12th, 2007At this point, over 60% of the top 50 lenders from a year ago are now out of business. These are the lenders that purchase the loans for pooling to be sold to Wall Street. The main culprit here is a very high default rate on high LTV loans along with “stated income” loans. Most of these are the lenders who provided the second trust financing for these loan programs….
Second trust means second to be paid off in a default/foreclosure situation! I’m sure have already realized this with the increased number of short sales we are seeing in our MLS systems
Be very careful with your listings and the offers you receive. Loan programs are disappearing daily. Insist that the lender provide the EXACT program that is being used for financing on the home. Make sure to call those lenders and go in deep to make sure the specific program will be available to the borrower on settlement day.
If you want to keep up with the latest lender implosions, try this site:
We are actually seeing buyers with commitments letters being declined a few days before settlement because a program was discontinued.
This seems like a trend that will continue so beware of the evaporating lender!!