Comments on: Underwriting Guidelines are Tightening Up http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/ Seattle's Leading Resource for Real Estate Information Sun, 08 Nov 2009 01:47:42 -0800 http://wordpress.org/?v=2.8.4 hourly 1 By: Rhonda Porter http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-335510 Rhonda Porter Thu, 19 Feb 2009 16:46:07 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-335510 Carolyn, your loan originator should immediately notify you of any changes that impact your transaction. Often times with underwriting guidelines, transactions in process are "honored" but it depends on who's guidelines...is it the banks overlays or is it Fannie/Freddie? This is why I'm asking for more info from you. :) Carolyn, your loan originator should immediately notify you of any changes that impact your transaction. Often times with underwriting guidelines, transactions in process are “honored” but it depends on who’s guidelines…is it the banks overlays or is it Fannie/Freddie? This is why I’m asking for more info from you. :)

]]> By: Rhonda Porter http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-335509 Rhonda Porter Thu, 19 Feb 2009 16:44:45 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-335509 Carolyn, can you provide more details about your situation? Carolyn, can you provide more details about your situation?

]]> By: Carolyn Webber http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-335498 Carolyn Webber Thu, 19 Feb 2009 13:49:05 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-335498 Who's responsibility is is to notify the buyer of these guidelines before closing. How were we to know that we may never be able to sell? Shouldn't someone have explained this to me? Who’s responsibility is is to notify the buyer of these guidelines before closing. How were we to know that we may never be able to sell? Shouldn’t someone have explained this to me?

]]> By: MGIC Tightens Underwriting Guidelines…Again | Seattle Real Estate ~ Rain City Guide http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-317389 MGIC Tightens Underwriting Guidelines…Again | Seattle Real Estate ~ Rain City Guide Fri, 09 May 2008 20:27:24 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-317389 [...] I have been saying for many months now, underwriting guidelines will, and should, continue to tighten until defaults begin to [...] [...] I have been saying for many months now, underwriting guidelines will, and should, continue to tighten until defaults begin to [...]

]]> By: So You Think You Might Need a Mortgage? | Rain City Guide | A Seattle Real Estate Blog... http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-166207 So You Think You Might Need a Mortgage? | Rain City Guide | A Seattle Real Estate Blog... Wed, 01 Aug 2007 22:09:57 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-166207 [...] So You Think You Might Need a Mortgage? August 1, 2007 The mortgage industry is facing historic times with the tightening of underwriting guidelines, programs disappearing and lenders not able to fund loans and/or closing shop.   The subprime meltdown is spilling into the prime mortgage markets.   Here is what you need to do if you’re considering buying a house and you’re not paying cash for your new digs. [...] [...] So You Think You Might Need a Mortgage? August 1, 2007 The mortgage industry is facing historic times with the tightening of underwriting guidelines, programs disappearing and lenders not able to fund loans and/or closing shop.   The subprime meltdown is spilling into the prime mortgage markets.   Here is what you need to do if you’re considering buying a house and you’re not paying cash for your new digs. [...]

]]> By: David Mordue http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-165828 David Mordue Tue, 31 Jul 2007 20:17:46 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-165828 A quick reference/rebuttal to Jillayne's post; You said; "For the past few decades, lenders have been heavily advertising to the consumer, to use their equity to pay off consumer loan debt, relying on rapid appreciation to stave off potential problems if a homeowner were to suddenly undergo severe financial distress such as a job loss, divorce, or failure of a business." Firstly, your time frame is off; Conventional Securitized mortgages have only existed for about 30 years. Following the S&L crisis, well into late 80's, mortgages were not easy to get by any means. Since the mid nineties, due mostly to so called "technological advancements" that came from innovation to process the high volumes of loans during the 2 refinance cycles, credit and underwriting policies became lax, and the processsing process virtually removed the human element in favor of a much more streamlined and computerized model. The mortgages that we are dealing with now are primarily mortgages originated in the last 5 years. We will have a lot of people who struggle to keep their payments on track for the next 18-24 months, but sure enough, that next refinance cycle will hit, and it will be even bigger than the 2001-2005 cycle. I'm looking forward to 2009-2010, I think these may be the biggest refinance years we'll ever see. Think I'm wrong? Then why are practically all of the big banks buying or leasing office space for call centers in India and Phillipines? .... So that when the next refi cycle comes, they can get their arms around as much as possible. Just my 2 cents. A quick reference/rebuttal to Jillayne’s post;

You said;
“For the past few decades, lenders have been heavily advertising to the consumer, to use their equity to pay off consumer loan debt, relying on rapid appreciation to stave off potential problems if a homeowner were to suddenly undergo severe financial distress such as a job loss, divorce, or failure of a business.”

Firstly, your time frame is off; Conventional Securitized mortgages have only existed for about 30 years. Following the S&L crisis, well into late 80’s, mortgages were not easy to get by any means.

Since the mid nineties, due mostly to so called “technological advancements” that came from innovation to process the high volumes of loans during the 2 refinance cycles, credit and underwriting policies became lax, and the processsing process virtually removed the human element in favor of a much more streamlined and computerized model.

The mortgages that we are dealing with now are primarily mortgages originated in the last 5 years.

We will have a lot of people who struggle to keep their payments on track for the next 18-24 months, but sure enough, that next refinance cycle will hit, and it will be even bigger than the 2001-2005 cycle.

I’m looking forward to 2009-2010, I think these may be the biggest refinance years we’ll ever see.

Think I’m wrong? Then why are practically all of the big banks buying or leasing office space for call centers in India and Phillipines?

…. So that when the next refi cycle comes, they can get their arms around as much as possible.

Just my 2 cents.

]]> By: David Mordue http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-165823 David Mordue Tue, 31 Jul 2007 19:58:59 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-165823 Just for clarification sake, I was referencing the FNMA guideline changes that took place as of 07/22. Thanks for the great replies, Rhonda. I'll be sure to stop by your blog in the future. Just for clarification sake,

I was referencing the FNMA guideline changes that took place as of 07/22.

Thanks for the great replies, Rhonda.

I’ll be sure to stop by your blog in the future.

]]> By: Rhonda Porter http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-165733 Rhonda Porter Tue, 31 Jul 2007 13:48:34 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-165733 Jillayne, re. comment 69, check out this press release from the State of New York: http://www.ny.gov/governor/press/0727071.html NY is teaming up with Fannie Mae to help people out of their subprime loans with their "Keep the Dream" refinance program. The homeowners (who meet income limitations) are being offered 30 or 40 year fixed mortgages and paying off the prepays with the proceeds. Jillayne, re. comment 69, check out this press release from the State of New York: http://www.ny.gov/governor/press/0727071.html

NY is teaming up with Fannie Mae to help people out of their subprime loans with their “Keep the Dream” refinance program. The homeowners (who meet income limitations) are being offered 30 or 40 year fixed mortgages and paying off the prepays with the proceeds.

]]> By: The San Diego Home Blog » Blog Archive » You just thought you were qualified to purchase that home. http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-164502 The San Diego Home Blog » Blog Archive » You just thought you were qualified to purchase that home. Fri, 27 Jul 2007 21:40:01 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-164502 [...]  (For the record, Rhonda Porter did a great job covering this a little over a week ago at Rain City Guide. Since I just received the First Capital report today, I thought it was worth revisiting here in case one of our three readers missed it). [...] [...]  (For the record, Rhonda Porter did a great job covering this a little over a week ago at Rain City Guide. Since I just received the First Capital report today, I thought it was worth revisiting here in case one of our three readers missed it). [...]

]]> By: Jillayne Schlicke http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-164447 Jillayne Schlicke Fri, 27 Jul 2007 17:03:14 +0000 http://raincityguide.com/2007/07/19/underwriting-guidelines-are-tightening-up/#comment-164447 Hi Rhonda, Oh sure, sorry. Here they are: Press release: http://www.occ.treas.gov/toolkit/newsrelease.aspx?JNR=1&Doc=M3ZM5FQW.xml Guidelines (opens PDF): http://www.occ.treas.gov/ftp/release/2006-107a(Guidance).pdf The OCC took public comments from Dec 2005 to the spring of 2006 and started sharing drafts of the proposed guidelines in the spring of 2006. Guidelines are just that: guidelines. They're not law, which is why the industry continued to ignore the underwriting guidelines. up until this month when fannie changed their software. Hi Rhonda,

Oh sure, sorry. Here they are:

Press release:
http://www.occ.treas.gov/toolkit/newsrelease.aspx?JNR=1&Doc=M3ZM5FQW.xml

Guidelines (opens PDF):
http://www.occ.treas.gov/ftp/release/2006-107a(Guidance).pdf

The OCC took public comments from Dec 2005 to the spring of 2006 and started sharing drafts of the proposed guidelines in the spring of 2006. Guidelines are just that: guidelines. They’re not law, which is why the industry continued to ignore the underwriting guidelines. up until this month when fannie changed their software.

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