Yikes! Big time. This morning, the entire world is watching to see what happens with Sub-Prime lender NEW CENTURY. Last week Fremont Bank crashed and burned. "Conduit" lenders like Greenpoint Mortgage, ResCap and Paul Financial have recently pulled back their loan programs, especially their No Money Down 100% Financing offers. "Conduit" lenders typically sell their loans in the secondary market on Wall Street. They facilitate the mortgage agreements and package up loans to sell to investors. Today, we're seeing the beginning of what will be a new era of real estate subprime loans that will ripple throught the entire banking industry in terms of paperwork compliance, accountability, product offering and creative financing. There are still lenders offering 100% loans, but guidelines are tighter; credit scores, income verification, the whole package. The effect of lack of policing in real estate financing: This is going to hurt.
Monday, March 12, 2007
SubPrime market crashes
Yikes! Big time. This morning, the entire world is watching to see what happens with Sub-Prime lender NEW CENTURY. Last week Fremont Bank crashed and burned. "Conduit" lenders like Greenpoint Mortgage, ResCap and Paul Financial have recently pulled back their loan programs, especially their No Money Down 100% Financing offers. "Conduit" lenders typically sell their loans in the secondary market on Wall Street. They facilitate the mortgage agreements and package up loans to sell to investors. Today, we're seeing the beginning of what will be a new era of real estate subprime loans that will ripple throught the entire banking industry in terms of paperwork compliance, accountability, product offering and creative financing. There are still lenders offering 100% loans, but guidelines are tighter; credit scores, income verification, the whole package. The effect of lack of policing in real estate financing: This is going to hurt.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment