Archive for the 'Subprime Meltdown' Category
This news hit yesterday in the Associated Press:
Wells Fargo cuts 500 jobs in mortgage unit
Tougher standards means bank will be handling fewer subprime loans
Updated: 12:13 p.m. PT March 20, 2007
SAN FRANCISCO - Wells Fargo & Co. is eliminating more than 500 jobs in a division that makes home loans to high-risk borrowers, adding to the economic distress caused by the decaying subprime mortgage market.
Most of the cutbacks, concentrated in South Carolina, Arizona and California, stem from Wells Fargo’s recent decision to make it more difficult for borrowers with blemished credit records to qualify for subprime mortgages.
…following on the heels of this article from Reuters on February 21st:
Wells Fargo cuts 320 subprime mortgage jobs
NEW YORK, Feb 21 (Reuters) - Wells Fargo & Co. (WFC.N: Quote, Profile, Research) said on Wednesday it is cutting 320 subprime mortgage jobs in two operations centers because it is tightening its lending standards to home buyers with poor credit histories.
About 250 jobs are being eliminated in Fort Mill, South Carolina, and 70 in Concord, California, according to a memo from Lynn Greenwood, a senior vice president of communications for the No. 5 U.S. bank’s home and consumer finance group. Wells Fargo is the largest U.S. subprime mortgage lender,
“As a result of changing market conditions — such as moderating house price appreciation — effective Feb. 16 we tightened our credit policy for a portion of our nonprime lending business,” Greenwood wrote. “This decision directly impacts our nonprime loan volume, which in turn impacts staffing levels in the areas devoted to managing these loans.”
read comments (0)HSBC Announces Pull Back on ALT A 100% Financing
…more 100% financing evaporates, this time from HSBC and affecting what we call ALT A.-not “A paper”, but not quite subprime either. Keep an eye on your 100% financing, even if it is already approved. If your lock expires before you can close, you may be without a loan.
PLEASE LOCK ALL 80/20 SIVA AND FULL DOC LOANS ALREADY REGISTERED TODAY WITH HSBC!!
HSBC WILL HONOR ALL LOANS ALREADY LOCKED BUT WILL NOT ACCEPT ANY MORE!!
NEW GUIDELINES WILL GO INTO EFFECT ON ALT-A IMMEDIATELY SIVA (stated income, verified assets) MAX CLTV 90% FULL DOC MAX CLTV 95%
Loan City Bites the Dust
Today’s announcement, posted on their website, entirely unexpected…
LoanCity is closed for business. Today March 20, 2007 is the last day we will be funding loans. To our customers, our staff and business partners - we thank you.
There are many people finding out as they near the close of escrow that they don’t have loans after all. What could be more unsettling than that?
Does your lender have the knowledge and experience to steer you away from trouble and weak lenders?
Got a question or concern? Email me.
Another Lender Pulls Back on the Reins
Just another in a daily stream of email notices from lenders tightening their guidelines. Take care with your approvals and recheck constantly. The loan you had approved may no longer exist.
Indymac Bank announces immediate changes to their 80/20 program, to take effect Tuesday, 3/20/07 (note today’s date).
All 80/20’s in their pipeline need to be locked no later than today for Indymac Bank to honor this product. This includes all subprime, Alt A, and prime loans that don’t fall within the guidelines below.
These loans have to be locked through the Emits system not the Quick Pricer. Here is a highlight of the changes:
The No Ratio 80/20 will be gone Full doc will now require a min, credit score of 680 and 3 mos. PITI reserves Stated will now require a min. score of 700 and 4 mos. of reserves Maximum loan amount for a 1st mortgage will be $417,000 200% Payment shock requirement will be eliminated 2/6 Libor program will be eliminated Alternative sources of credit will no longer be acceptable
Got questions or concerns? Send me an email.
Most likely nothing!
He could care less right now, having just won Stage 5, the second time trial of the Tour. Levi also won the opening Prologue and holds the yellow jersey as the overall leader. Congratulations Levi!
So rather than trying to create a cheesy tie-in to explain this digression, let me just simply say:
THANK YOU SACRAMENTO!!
for your tremendous support of the AMGEN Tour of California! May Sacramento forever remain on the tour route. Think about this: the television coverage of this year’s event exceeds what ESPN use to give the Tour de France just a few short years ago. Thanks to Lance for that, (Lemond, just get over it).
As a recreational cyclist, I have the pleasure of riding some of the most beautiful country to be found outside of France and Italy. From the Sierra Century to the Markleeville Death Ride and the Davis Double, Northern California offers spectucular scenery, unbeatable weather, coastal terrain
as gorgeous as the Amalfi Coast and mountains to rival the Alps. I’m just happy that so many of the great European cyclists and team are here this enjoying it. How could they not want to return after experiencing this first hand.
Anyway, these great photos were taken by Randy Pench and Lezlie Sterling, and poached from the Sacramento Bee’s photo gallery. Please go check that out at: http://data.sacbee.com/photography/view/tour?&. Credit and thanks to the Sac Bee, Randy and Lezlie!
Have a wonderful weekend, and hey, about that subprime meltdown thing. Don’t worry about….at least until next week!
States Weigh Mortgage Loan Suitability Standards
What’s next for the mortgage lending industry, beset by deepening accusations of predatory lending and mortgage fraud?
Well, several states are considering the creation of suitability standards, similar to what stock brokers and investment advisors live with in the securities industry. If this movement takes shape, mortgage lenders might be required to furnish evidence that the loan program recommended was suitable for the client’s needs, level of understanding, and sophistication.
However, Kurt Ptotenhaur, senior vice president of the government affairs for the Mortgage Bankers Association (MBA) argues that “Making the lender responsible for determining which loan is suitable for a borrower will limit consumer choice and could deepen the slowdown in the housing market,” and may result in discrimination at worst and subjected decisions made by the lender about who should have access to certain loan programs. See the MBA’s Policy Paper for more.