Union Home Mortgage Review – NEW Mortgage Standards! Why the BANK DENIED YOUR LOAN!
Union Home Mortgage Review – Best Deal Right Now?
BANK DENIED YOUR LOAN!
WHY banks and LO are denying you loan and NEW mortgage standards!
Is this the tell, tell signs of a crash??
I am starting to have this conversation more as lenders start to tighten their standards for buyers.
How do I know its getting harder to get loans?
I’m seeing it firsthand in Ft. Bragg/Fayetteville, NC!
– 57% of buyers don’t put more than 20% down on a loans (FHA, VA, USDA, etc)
That on top of hearing rumors that loan officers were raising their credit score requirements to 700+.
Article below about Chase and others raising their credit score of 700+ and 20% down to get a mortgage: https://www.housingwire.com/articles/chase-now-requires-700-fico-score-20-down-payment-to-buy-a-home/
Last-minute VOEs or verifications of employment:
I’ve read anywhere from 10 days before the settlement date all the way to the day of!
United Wholesale Mortgage, the second-biggest mortgage lender in the country, recently announced that it will require reverification of a borrower’s employment on the day their loan is scheduled to close.
Rental income to apply for a loan: It may not apply to all mortgage companies but for my investors I also read that if you’re using rental income to apply, it may only be used if the borrower’s credit score is greater than 700 and the borrower can document six months of reserves for each financed property in which rental income is being used to qualify. – probably a good practice anyways, but there’s a heads up.
The Mortgage Credit Availability Index (MCAI):
When the MCAI rises, it means lending standards loosen and there is more “mortgage credit availability”; and when it falls, it means lending standards tighten and there is less “mortgage credit availability.”
The mortgage industry is tightening their mortgage lending standards and the MCAI fell 16.1% in March!
Since we are in a heavy VA market (Ft. Bragg – home of the Airborne and Special Operations Forces) –btw, we love referrals — I wanted to check out the “Government MCAI,” which tracks mortgages that are backed or insured by government agencies ( FHA, VA, USDA). It too fell by 6.6% from February to March.
You may have heard of “subprime is back” and that we are returning to the day of risky mortgage products … DOOOOOM!!!
I’d be careful to listen to that. Just look at the MCAI and how loose mortgage standards were back in 2005-2006… It was bananas just how loose the standards were.
You’ll see just how much they tightened up during 2006-2008.
From 2009-2012 you didn’t see much change from the MCAI and it only started to creep up around 2013 BUT STILL… Nowhere near where it was at in 05-06.
Article showing the true picture of the mortgage credit available: https://www.housingwire.com/articles/47319-mortgage-credit-is-now-more-available-than-at-any-time-since-the-crisis/
Convo from LO:
Highly respected loan officer in our market, Casey Mock, had this to say on fb:
“Let’s control what we can and face each moment as it comes.”
“know that banks and lenders want a robust lending environment. What we have now, is a stark reality of foreclosure and forbearance losses that are here now and that will continue. That reality, and the uncertainty of how long this will last, is causing banks and lenders to defensively price and make loans. What does that mean? It means they will lend, but only to the most secure of buyers, with the most secure products. It’s a matter of survival and responsibility.”
“we owe it to our clients to ensure we don’t set them up for failure. When we have a deal that doesn’t close because someone is laid off, it’s crushing for all involved. However, it’s our duty at the time of making a loan to someone, that we have ensured they are in a good position to pay back that loan. Anything less is a betrayal to our client.”
Ruben Garcia and affiliates and related parties do not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.