Aurora will still do it, and there are still others out there. Most lenders will not allow negative operating income so that is one major obstacle. Most lenders will require between 6-12 months of PITI as well. Par rates for these type of loans are in the 9’s right now which makes it very hard to cash flow. Hope this helps.
Does anyone know how long these new requirements will stay in place. I see this as really hurting the investment market, especially for investors that need to get out of a home b/c of problems. Not many investors can afford the 10% downpayment these days.
I have been investing for years and never put down more than 5% and now the 2 brokers I have used for last couple years have no NOO programs avail w/o 10%down really. I was thinking of buying a condo with great numbers but honestly did not feel like tying up 20K into the property since it had such great numbers but now I am stuck with this 10% downcrap and crazy interest rates…
Indeed its getting harder for subprime folks. My mort. broker got a buyer for one my properties in the door with a 550 FICO. BUT…I had to carry back a “true” seller second of 20% to get him in the door. Bank wouldn’t touch him if I didn’t carry. His interest rate is 10.25% on the first mortgage.
Scores not an issue (individuals with no scores are also considered).
No need for seller second (financing up to 97 LTV; 100 CLTV with DPA).
No double digit rates and no seconds (one loan up to 97 LTV/100 CLTV)
FHA will fill part of the void that the growing number of subprime lenders will leave in their wake.
No. Can you please post more info on this. I do not know the difference between subprime and FHA and why FHA can work? Does FHA stand for federal housing authority? Do brokers deal with FHA loans? What is a FHA loan? Feel free to educate me!
shinauldc: Who is still offering that program? (100% stated NOO 720+ fico)
My opinion is that this current market will likely last through the summer, but lenders will start loosening up again toward the end of the year once the dust settles. Once lenders start to feel comfortable again and get their bottom line in order, they will start to see opportunities again with riskier loans. For example, lender A will say, hey wait a minute, I can offer 100% financing with a 600-619 credit and since no one else is doing that right now, I can bring in a ton of business.
With the kind of returns lenders can get on mortgages that are secured at 9-10-11%, some lenders will start to ease back into the riskier loan business and will be willing to accept the potential risk.
I don’t think we will ever see the “560 fico one day out of bankruptcy 100% loan” again, but it’s inevitable that lenders will once again serve the subprime market.
We used to take subprime requests even people with 500 credit scores but not any more so getting 100% financing might be more difficult than before. In the past month, subprime funders have decided not to take any more subprime loan requests.
Aurora Mortgage Maker will do loans under those guidelines. However keep in mind they also have guidlines on landlord experience and negative operating income. Means two things; if you are a new investor you are limited to the number of properties you can acquire over a two year period, and if the rent on the property multiplied by .75 is not greater than the total PITI payment then the loan will be declined. Lastly the rates are ugly. 10.25% last time I checked. The best rates these days are at 90% LTV.
Not to split hairs, but it is Wall Street calling all the shots…Wall St. pulled its warehouse lines and down went 40+ lenders…Wall St. lost its appetite for certain loans and lenders reacted by changing guidelines, etc.
Those playing on the fringe are doing so with depository funds because Wall Street isn’t buying it anymore…
Your guess on what happens next is as good as mine, but one thing hasn’t changed…Those that have the money will continue to make the rules.