“More Subprime and Non-QM Lenders are making their way into Residential Lending”

“More Subprime and Non-QM Lenders are making their way into Residential Lending”

 

Many of us in the mortgage broker world have been predicting for a long time that this will keep happening and why not, these lenders charge a higher rate and that is why they are willing to take more risk.

 

I am not surprised one bit. Most QM lending continues to be more restrictive so all the talk about lending guidelines and restrictions continue to get tougher, not the other way around. It is not one bit shocking that homeownership is at the lowest level in nearly 50 years.

 

It is often hard for me to recommend some of these types of loan products; rates are higher, much higher in many cases. I recently got a quote for a client where the rate was going to be 7.5% and the loan had a two year prepayment penalty. When I was asked what they should do, I recommended waiting 12 months, working on the credit and getting a much better loan at that time.

 

This is a bit extreme, as many of them will fall into rates in the 5% to 6% range with terms that are more acceptable and are a good option until we can refinance them out of this kind of loan. No matter what, while we wait to get out of it working on the issues is crucial.

 

At least there are options and there will be more of them, but also at higher rates.

 

Image courtesy of stuartMiles/freedigitalphtos.net

Subscribe to my blog via Email:

 

Enter your email address:

Delivered by FeedBurner

 

Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

Like me on facebookfollow me on twitterConnect with me on linkedin

Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.

Comment balloon 20 commentsJoe Petrowsky • September 25 2015 10:54AM
“More Subprime and Non-QM Lenders are making their way into…
share
“More Subprime and Non-QM Lenders are making their way into Residential Lending” Many of us in the mortgage broker world have been predicting for a long time that this will keep happening and why not, these lenders charge a higher rate and that is… more
“Interpretation of New FHA Guidelines Create Lots of Problems Already”
share
“Interpretation of New FHA Guidelines Create Lots of Problems Already” To say that FHA wants to restrict lending would be an understatement. So, all of the BS about guidelines being loosened up is just that. Here is an example of someone that… more
“Stop Disputing Accounts When You Owe the Money”
share
“Stop Disputing Accounts When You Owe the Money” I recently met with a client to discuss future plans to purchase a home but it wasn’t going to happen anytime soon. There were 13 Collection accounts that were on the credit report. All showed as… more
“Get Verification When You Pay Collection Accounts”
share
“Get Verification When You Pay Collection Accounts” Many clients that I obtain a credit report for have collection accounts and often say these accounts are already paid. I will explain that I need evidence so that I can send the information… more
“Location or Price? ”
share
“Location or Price? ” A Realtor referred a prospective client this morning to discuss a mortgage. The specific loan that he wanted to address was a FHA 203 K. The main discussion was that the home they are interested in was not in the best… more
“Love When Things Come Together”
share
“Love When Things Come Together” The challenge was finding the home that my client wanted to purchase and needing to sell her current residence. After speaking to the agent, she told me that property was being listed at a price that will sell… more
“You Just Never Know Where that Next Referral is Going to Come From”
share
“You Just Never Know Where that Next Referral is Going to Come From” I was at a networking event the other day, probably 30 people there. I normally am not shy about going up to someone to introduce myself, even better if there is a group of two… more
“It Doesn’t Always Start off Easy”
share
“It Doesn’t Always Start off Easy” “Hey Joe….. I want to first start off by apologizing to you for my rude behavior yesterday. I wasn’t having a good day, but that was no excuse for me acting like a putz, so I apologize for that. You’re a nice… more
“Attorney tells his client, If You Don’t Close by October it May NOT…
share
“Attorney tells his client, If You Don’t Close by October it May NOT Close this Year” This is not the first time I have heard a client make this kind of statement. These kinds of statements to prospective home buyers are pretty foolish. Scott… more
“Extraordinary Customer Service Costs Nothing Extra but it can Cost…
share
“Extraordinary Customer Service Costs Nothing Extra but it can Cost YOU Future Business” “It was a pleasure speaking to you Joe. Thanks very much for the quick response for the pre-qualification letter and the inspector referral. Thank you. ” … more