DISQUS

LG · 1 year ago

The reason these companies are doing away with the "My Community 100%" is because MGIC, RMIC and GENWORTH are no longer providing mortgage insurance up to 100%. I guess they were stung too many times. Conventional loans are getting a little ridiculous with the changes and bumps due to FICO scores and the MI changes. FHA is the best program for home buyers if they can fit into the loan amounts for their area. The only good 100% programs after March are Rural housing and VA. FHA could be 100% with a charitable contribution for the 3% down into the transaction from the buyer's side.

rcarrillo · 1 year ago

As LG said. I am disappointed that programs meant to help average homebuyers are becoming harder to find.

Stated income 100% financing or 100% for those with damaged credit was of course a bad idea. The point of My Community, like FHA, was to help homebuyers that had decent but not great qualifications buy with affordable financing. It is hard for first time homebuyers or those with low to moderate income to save 5-10% down. Many have excellent credit, debt-to-income and savings history... but that first rung on the homeownership ladder can still be out of their reach.

I think if more brokers and lenders had encouraged programs like FHA and My Community over the last few years instead of 100% reduced doc loans for all.... we would not be in the mess we are now. Unfortunately, this is another case of everyone having to pay for the irresponsibility of a few.

Tom Vanderwell · 1 year ago

Wow, I'm going to have to look up "erstwhile" to see what that means!

Seriously, we've seen a lot of program changes on the retail side. Looking at the list that shows in the post, a lot of those changes are being implemented on the retail side as well, but some of them are not.

I know that on the retail side, we can still do the My Community and Home Possible at greater than 97%. They are in essence, on the retail side eliminating zero down unless you make below 100% of the median income for the neighborhood.

But we aren't hit as hard as the wholesale is.

Make sense?

Tom

Oh, and yes Morgan, I got the Wholesale X2 joke. It was really funny. :-)

LG · 1 year ago

I use to work for a lender who had the heartbeat and decent FICO score loans which some called "Fast and Easy"," Super Simple" which I rarely did those deals. Stated income was suppose to be doc relief for self employed not let's make the Stated income an income that makes the deal work even if it was inflated by thousands per month. The other problem loans besides the subprime 2/28's and 3/27's with prepayment penalties and high rates for those who had credit issues to begin with were the Payment Choice deals with the Negative Amortization deals that loan officers pushed figuring the houses would appreciate so it wouldn't matter if the borrower was adding to the back end of their loan. It is a shame that a few bad programs had to shake up the industry the way it did. Rates should be about 3/4's percent lower based on the Fed's actions but investors are too uncertain to buy the mortgages.

David · 1 year ago

I think that you have some facts distorted. The lenders are changing the programs because the MI companies will not write the MI

JM · 1 year ago

Seriously? Borrower who want a home so bad cannot come up with 3% down now. Nothing in life is free and that is what we have done for borrowers for so long. 100% financing with no Home Buyers Education. Consumers can go to starbucks, out to dinner , buy cigs, go out drinking and spend all of this money over a year which if they saved probably would probably be there down payment.

We need to educate our borrowers on the what it takes to buy a home and make the payments every month. Not say owing a home is the great american dream and we will get you into it for nothing out of your pocket and not educate on how to manage there finances.

This is a bad article.

morganb · 1 year ago

I'm not a proponent of 100% financing - I just think it's interesting that Fannie and Freddie designed these products to be conforming products, and now conforming products are being discontinued even those the GSEs will still buy them.

I agree w/you people need to be able to bring something to the table when buying a home - it's the only way that home prices will return to a decent level of affordability.

Utter Disbelief · 1 year ago

Morgan...do you have a clue how the mortgage business works? The banks are not eliminating these products, the MI companies are. As of today there is not a single MI company that will write insurance at 100% LTV period.

"Further, mortgage insurance is required on any cash-out refinance for a borrower utilizing expanded-approval with less than a 680 FICO score, I imagine regardless of LTV, which is an indication of just how cautious refinance lending has become out there."

I imagine you don't do any fact checking before you post inane comments. The requirement is that the minimum score in order to obtain MI is 680...not that MI is required for scores <680. It's unavailable for scores <680. Furthermore, MI is NEVER required for LTVs of 80% or less, you moron.

morganb · 1 year ago

At least you man up enough to use your real name when bashing me - seriously though, it must be nice making up a screen name and calling people douche bags - I'm sure you feel good about it.

Anyway, I get that MI companies are eliminating the products. What I find interesting is that the GSEs are still buying these products. So it just points to the interesting disconnect between how the GSEs are limited in what they can do in terms of making liquidity available.

You have a good point about the LTV, I wrote the post in about three minutes while playing with my son, I didn't expect it to end up on the Implode-O-Meter and I really didn't think before I wrote it, so good calling me out - next time just don't be such a douche bag about it.

Tom Vanderwell · 1 year ago

I believe that blaming Fifth Third for these cutbacks is misleading. If we can't get mortgage insurance, we aren't going to write the loan because Fannie and Freddie won't buy the loan without MI.

morganb · 1 year ago

I don't think there is any blame in the above post. It was just an observation. The banks are being smart - it is just an interesting disconnect between the freddie/fannie offering and what can actually get done these days.

Tom Vanderwell · 1 year ago

I agree about the disconnect. Do you think the PMI companies are being too cautious or are Fannie and Freddie being too slow?

I think Fannie and Freddie are being too slow......

morganb · 1 year ago

It's definitely Fannie/Freddie too slow, although the mortgage insurance companies have been far too slow to date. They have little cash, tons of leverage and tons of downside. We'll see one of the big ones go down hard before this is all over.

Graeme · 1 year ago

I agree, douchebag. My name isn't Graeme.

Tom Vanderwell · 1 year ago

I think we'll be fortunate to have only one of the "big ones" go down hard before this is all over.