My New Blog

     With all of the volatility on the mortgage industry, there are things that an agent and buyer can do to protect themselves. Mortgage Companies are having more trouble taking there loans and selling them on the secondary market. The word sub-prime is used often and is synonymous with "toxic waste" to wall street, who buys loans on the secondary market. This has affected all types of buyers, even with perfect credit. This is primarily loans that are over $417,000, as these loans are sold and backed by FANNIE MAE and FREDDIE MAC, or any sub-prime lenders.  I have heard the lenders are canceling there loan commitments at the last minute leaving the buyer with no loan and no options for a loan.

     During this tumultuous mortgage crisis, I advise the buyer not to remove there loan contingency until at least to when there loan docs are drawn. I understand this makes it extremely uncomfortable for the sellers, as they are making decisions on possible purchasing a new home for themselves. Like the buyers on there home, they too should not remove there loan contingency. Additionally, the buyer and agent needs a lender who will effectively communicate and update all parties in the transaction. The buyer, and seller need to know what type of loan and how this type of loan may affect their sale or purchase. The buyer needs to ask for a loan commitment from the lender. To do this, the buyer needs to expedite the paperwork and get it to there lender as quickly as possible. This will help there lender get the loan to underwriter quicker. I believe shorter escrows will also help in the volatile mortgage market.

     Jim Sroka

     Mortgage Loan Consultant