Is There Any Mortgage Money Available Right Now?

Over the last few weeks, we have seen wild fluctuations
in the financial markets.

Congress couldn't agree on a "rescue plan", and then a
week later, finally put together legislation that was
signed immediately by President Bush.

A big rationale for the "rescue plan" was due to the
fact that credit markets had become very illiquid as
lenders and investors were forced to hold mortgage
loan assets. A larger-than-normal percentage of these
assets were not being repaid in a timely manner which
leads to foreclosure. There were no buyers for these
loans, or for other loans that are currently being paid
well, because investors have no confidence in the
quality of the loans.

So, the "rescue plan" was designed to have the govern-
ment buy these troubled assets to free up liquidity for
the financial institutions and allow them to start
lending more freely again.

But, throughout this process mortgage lending has
continued.

Despite the financial troubles they have been going
through, Freddie Mac (FHLMC) and Fannie Mae (FNMA)
have been purchasing loans up to their conforming
limit of $417,000 with regularity. They have also
been authorized to purchase loans up to $729,750
(depending on which county the property is in) through
the end of this year and loans have been created in
this categoy as well.

The jumbo loan category, those loans above $417,000
(and temporarily those above $729,750), has been
severely restricted. Institutional investors and
those buying mortgage-backed securities through Wall
Street have no appetite for buying these products
right now. Consequently, interest rates are high
for these loans, and availability is extremely limited.

Now, please understand that the qualifying standards
are not as liberal as they were in the past. For the
most part, loans that accept low credit scores, that
accept stated income from the borrower, and that are
above 90% of the value of the property are not readily
available.

So, the key to the kingdom is that your qualifications
include the following:

* Strong credit scores

* Provable, stable income that meets the lender's
current qualifying criteria.

* A strong equity position in your home, or a sizable
down payment on the home purchase.


Mortgage lending has not stopped. Qualifying is more
strict.

If you have an interest in buying a property while
prices are substantially lower than they have been,
or want to see about renegotiating your existing
home loan, just give me a call.

We can work together to see what is possible in this
lending environment, and do our best to help you reach
your goals.