Posted by Charles_Ca on 3/1/07 7:00pm
Msg #177797

Wall Street doesn't want any more sub-prime loans...

I just received this from one of my lenders:

Wall Street does not want Subprime loans
As you may already know the subprime market is being hammered and many subprime lenders have gone out of business. Wall Street investors have either stopped buying subprime loans or have substantially increased the yields they require on the loans they purchase. Some of the reluctance to purchase higher risk loans has also effected the Alternative loan market.

Today, I received notices from two investors that they were suspending their purchases of Alt. loans.

Subprime and Alt loans - Watch for these industry changes:
Elimination or, much stricter underwriting guidelines on Stated Income loans for W2 employees.
Raising the FICO and underwriting requirements for all 100% financing. Currently, borrowers with as low as 580 FICOs can find 100% financing; that is likely to be eliminated very soon.
Stricter underwriting requirements for First-Time borrowers.
Elimination of underwriting guideline exceptions for Subprime and Alt loans.

If you are working with pre-approved borrowers that require 100% financing or have marginal credit (below 620) those borrowers should be re-qualified to make sure that financing is still available.

Reply by cyndi_ca on 3/1/07 8:49pm
Msg #177817

Hey Charles! Can you say forclosure? Sadly.

I am already seeing this in my neck of the woods. Soon will be a great time for the investing vultures

Reply by Charles_Ca on 3/1/07 9:14pm
Msg #177821

Yeah Cyndi, me and my ilk are starting to circle and the...

body ain't even dead yet. They say its an ill wind that blows no good. If you have a little cash saved up and you want to get some ideas on how to best go after the foreclosure market let me know, I'll be glad to give you the benefits of my foreclosure course on equity sharing. Most people who are in trouble are that way because of unfortunate circumstances some of which are self-created. Now before all you guys dump on me for being heartless consider this. My favorite way of investing in the foreclosure market is to get the homeowner when the first notice of default is filed (there are ways of being informed) and to approach them to see if there is anything that can be done. Remember the post about the re-fi to get a Hummer, that is the mentality you have to work with. I offer an equity sharing program where I bail out the homeowner, let them stay in the home and continue to make the payments, correct their credit and then at a specific time they can either buy me out or we sell the home and share the equity. It is a win-win situation, the home owner gets to stay in their home, they don't go through foreclosure, they don't get embarassed in front of neighbors and friends, their kids don't have to change school, and they have an opportunity to straighten out their credit and then if they want they buy out my share or we sell the property and go our own ways. Everyone wins.

Reply by Margaret_FL on 3/1/07 9:56pm
Msg #177831

Re: Yeah Cyndi, me and my ilk are starting to circle and the...

Hey Charles, that's exactly what I am doing. It feels great to help the home owner out. There so many options other than foreclosure, they just do not know where to turn. I get the leads for the investor and I get a fee when the deal closes.

Reply by Charles_Ca on 3/1/07 10:06pm
Msg #177837

Way to go Margaret! n/m

Reply by Margaret_FL on 3/1/07 9:53pm
Msg #177829

I have been locating foreclosures for an investor partner and it is amazing how much you can find out online . I can go on line at my courthouse and search for Lis Pendens, there are hundreds daily posted. I am doing foreclosure and pre-foreclosure inspections and business is booming. The majority of the foreclosures are Countrywide. 5 purchases I did last year are in foreclosure. I predicted these would be in foreclosure when I did the closing. 80/20 loans, Countrywide was the preferred lender and was paying the 1st years Home Association Dues, after the additional $200 came due, they can't make the payments. They are in foreclosure and the Home Association is suing them also. 3 , 2 million dollar homes near me in an exclusive gated community are also in foreclosure. The home association dues in these communties can be $2,000 a month. I always told my children that you were not rich just because you had an expensive home, car, boat, etc. I always told them that most people were in debt for all those things.

Reply by Charles_Ca on 3/1/07 10:04pm
Msg #177835

That is an excellent object lesson for kids. My daughter might not e the best financial planner but she covets her credit rating like it was gold (which it is) The course that I teach is only for California. I had a long call from an attorney in Ft. Lauderdale this morning and we were comparing foreclosures between Florida and California. Ca has a deed of trust with a trustee who holds the deed until there is an action and then the trustee files a notice of default which starts the foreclosure process on behalf of the beneficiary (lender usually). I understand that in Florida the foreclosure process is conducted by attorneys. I am sure that the attorneys do well. I am sure that getting involved in the foreclosure from what you were saying and what I heard today can benefit many notaries financially if they look into the process in Florida. I California it is easier for the average individual to get involved in the foreclosure process than it appears to be in Florida. I'm glad to hear you are involved Margaret the process needs good, honest individuals.