Wednesday, August 15, 2007

Increased Interest Rates and Tighter Lender Requirements

The increase in interest rates, and the tightening of lender requirements, is hurting buyer’s purchasing power, which is creating less able to purchase buyers in the marketplace. While I think it is good thing that lenders are finally tightening up their requirements for loans to eliminate buyers that borrow ‘above their means,’ the resale market is hurting because there are fewer qualified buyers able to write contracts on homes. As a result, homes are staying on the market longer, or not selling at all, due to a limited number of approved buyers. We are also seeing homes that have contracts not going to closing because the lending requirements have changed and the loan that the buyer got approved for is no longer available.

The Washington Post touches on this issue in this article.

Thursday, August 09, 2007

American Home Mortgage Folds

The mortgage industry suffered a huge setback yesterday as 'American Home Mortgage' was the first large lender to fold in the market place. It's unfortunate for their employees and clients to be told on the last day of the month in July that they were not going to make payroll, nor fund the $400,000,000.00 of loans across the country that were due to settle on July 31, 2007. Unfortunately, this seems to be the first of many mortgage companies that are having financial troubles and are cutting-off their funding for popular loan programs.

Read the Washington Post article here.