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Mortgage Delinquencies Up, Loan Applications Down, Yikes!

Fannie, Freddie and refis, oh my

washington moneyThis past week revealed new loan applications at a volume unmatched in 12 years while the number of refinanced loans is down 9.5% in October.

Amy Cavender of Simplified Mortgage Solutions noted, “we are completely back to basics as far as underwriting goes – I’ve not seen it like this in awhile.  The pendulum is completely on the opposite side from two years ago.  There are really only “vanilla” loans out there right now.”

Residential loans are in trouble, as 9.64% are delinquent, Fannie Mae’s portfolio value declined 27.8%, and Freddie Mac’s portfolio value decreased 21.6% this year.

Cavender said, “I believe 203K loans will be in huge demand based on the type of inventory that’s out there right now – many of the distressed properties need some work.  Refinances are down because we are having problems with values.  I don’t see it getting any easier any time soon.  Many investors are raising their minimum fico score to 640.”

This month’s Standard & Poor’s report noted the fact that so many option-ARM borrowers owe more than when they first bought their homes due to accumulating unpaid interest and a large number of loans bought in the 2004 boom are coming due for their five-year reset when they become standard amortizing loans, throwing many loan-to-value ratios out of whack and monthly mortgage payments more than doubling in some cases.

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Buckle up, y’all, we’re in for a bumpy ride.

Lani is the COO and News Director at The American Genius, has co-authored a book, co-founded BASHH, Austin Digital Jobs, Remote Digital Jobs, and is a seasoned business writer and editorialist with a penchant for the irreverent.

16 Comments

16 Comments

  1. aMY L cavENDER

    November 30, 2009 at 2:17 am

    Thank you Lani – if you or any of your readers want any other information – I am glad to provide. You rock sister!

  2. Susie Blackmon

    November 30, 2009 at 7:19 am

    Thanks for not fluffing the info. Wow!

  3. Mike

    November 30, 2009 at 10:53 pm

    Here in the NoVA area you have little chance with 203k streamlines. Our inventory is so low that any of the physically distressed REO’s get 10 cash offers. I can’t find anything for my investors. If a back-log of REO’s truely exists, it’d be a good time to release them. We have the buyer pool.

  4. aMY L cavENDER

    November 30, 2009 at 11:29 pm

    Thanks Mike for you comment. It shows how markets are different. I’m in a highly populated military community. I’m amazed at the number of our soldiers who are deployed and for one reason or another they have their home foreclosed. When people are desperate because they are losing their homes, they go to all measures. I’m happy your community is not experiencing what we and many other communities are experiencing.

    Just to clarify: It’s not just military in my sphere that are losing their homes. It’s affecting all walks of life, every career, age group, race, etc. Economic hardship is not discriminating.

    To your success.
    Mylender

  5. Lani Rosales

    November 30, 2009 at 11:52 pm

    Amy, thanks!!

    Susie, it’s easier to be a little more objective when you don’t have a horse in the game- I’m not an agent OR a lender. 🙂 Thanks for noticing!

    Mike, you can send the investment dollars to Austin, there’s not a mass bidding war here and there’s a lot of inventory available (median price around 200k), just sayin’! lol

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