As most of you are aware, the lending industry is going through a major transformation. Many of our partners are closing their sub prime departments (for example Wells Fargo closed their Alt A / Subprime department just last week; they closed their retail store fronts here in St. Louis this year).
Every day it seems that we get notification that loan programs are no longer available—mainly 100 percent loans for borrowers stating their income and/or with FICO scores 640 or below. Chase also removed their Stated Income 80/20 loan.
Washington Mutual’s Long Beach sent notification July 20, 2007 that they were eliminating all of their Stated Income and Limited Doc programs, along with their 2/28 and 3/27 hybrid loans. Their max CLTV is 90 percent now.
Some of our competitors are closing their doors—others are tightening up on their underwriting guidelines.
Wachovia is here to stay. We still have 100 percent loan programs and competitive rates, but please be aware what is happening in the lending industry. As you know, it is important as real estate professionals to know the challenges your buyers may face in the upcoming months.