MORTGAGE LENDING: A national tightening of mortgage lending requirements is hurting some local mortgage brokers and prospective home buyers. Durango mortgage brokers say deals have dried up for sub-prime mortgage customers and potential home buyers with marginal credit and no money for a down payment are being shut out of the market. People without good credit and good income are not able to get 100% financing and they're unable to purchase homes that three months ago they could have purchased.
A leading lender of subprime home mortgages, New Century Financial of California, filed for bankruptcy on Monday. More than two dozen subprime lenders have shut down in recent months and many more are scrambling to stay in business.
Subprime loans target borrowers with low credit scores. The loans carry relatively high interest rates but can offer low initial payments. As Realtors we obviously promote home ownership. That being said, we don't believe, however, that individuals with poor credit should be taking on more debt and we don't believe that lenders should be fast and free wheeling in their lending practices. Trouble always follows.
We've been through the tough financial times in the mid 70's and mid 80's. We've seen what happens when lenders lower their standards. Many of todays mortgage brokers were in grade school then.
http://HomesInDurango.com / http://DurangoRealEstate.biz
No comments:
Post a Comment