I found this interesting blurb on how the lending side of our industry is adjusting to the subprime implosion:

Underwriting Guidelines:

Just because your favorite lender did a non-owner occupied, 90% loan-to-value, stated-income loan for you yesterday, doesn’t mean they’ll do it for you today. Loans that were easily underwritten before are now under scrutiny. Lenders are just not underwriting what they used to.  And, they are stopping your loans in their tracks.

Underwriters have good reason for being so cautious. “318,355 properties entered some stage of foreclosure nationwide during the third quarter of 2006, a 17 percent increase from the previous quarter and a 43 percent yearly increase from the third quarter of 2005,” according to Realty Trac’s (Irvine, CA) Q3 2006 U.S. Foreclosure Market Report.

In an effort to better manage loan portfolio losses, many non-prime and Alt-A lenders and investors are changing their underwriting guidelines without giving any notice. When weighing the possibility of declining property values with increasing foreclosure rates, can you blame them? 

Be prepared for more loan guideline changes, stricter policies and possibly higher rates as lenders and investors try to adjust for mortgage losses. 

What does this mean for you? It means that as guidelines change daily we may be asking for additional paperwork or information that we did not anticipate needing up front. But rest assured we will continue to offer you and your clients the best in customer service and communication. This isn’t something we anticipate going on forever, but it’s something we have to adjust to and get through for the time being.