New restrictions on financing

[Capricious]

http://blownmortgage.com/2007/08/03/condo-owners-may-be-the-next-ones-out/



Just another topic for conversation

 

[SHELLY]

Cap,

This is still too new....give it a couple of weeks to a month--then the "fit will hit the shan."


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[Mango]

Cap,

This is still too new....give it a couple of weeks to a month--then the "fit will hit the shan."


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The fit will hit the fan for Option One is more like it. What they are doing is absolutely illegal. It's called redlining. You can say we will not do loans in the State of Florida, Nevada or anywhere you please.

"You can not say"we will not do condo loans in Florida" which is what they are doing.

What they should have done was changed their underwriting guidelines for condos like lowered the LTV, lower the amount of investor units allowed, not taken a loan that had any owners in arrears, bkcy or foreclosure.
This would have eliminated most loans with an Alt-A lender without redlining a whole State. :roll:

 

[scooterbug44]

Why do they care what type of housing you are investing in if the person is a good risk?

I can see making the requirements more stringent - actually checking if people have the money they say they do, requiring a % down payment for example.

How come not lending in specific areas is illegal, but not writing insurance coverage isn't?

 

[beachmouse]

It is perfectly legal to refuse to lend or to charge higher rates in condo buildings that do not have X% of the units owner-occupied. Such lending practices were very common beore the boom.

 

[scooterbug44]

I'm familiar w/ banks wanting a certain % of units presold before construction starts, (seems like good sense) but I thought the article said they are just refusing to loan money for condo purchases - period.

 

[Miss Kitty]

sheet meet fan

 

[Capricious]

It is because of "no red lining" that it applies to all of Florida rather
than the most over-built areas (i.e. Miami et. al.)

While the main problem is the East coast ( and not necessaily
Walton County, at least to the same extent) ALL of Florida
will suffer.

And Option one is probably just the first. You can be
sure that other lenders will follow suit.

Just within the past one to two weeks lender after
lender has been tightening their rules.

The mortgage brokers are squealing:
http://forum.brokeroutpost.com/loans/forum/active.asp

What was possible even just a week ago is no longer possible.

The name of the game is liquidity: if you have cash, your time has
come. If you rely on credit, you're toast.

 

[scooterbug44]

So the banks/lenders are tightening their rules so you have to be able to afford/pay off your loan ................ works for me!

I'm Scotch/German, so I was raised that if you have to finance it (with the exception of a house) or go into debt for it, you don't need it.

 

[Miss Kitty]

So the banks/lenders are tightening their rules so you have to be able to afford/pay off your loan ................ works for me!

I'm Scotch/German, so I was raised that if you have to finance it (with the exception of a house) or go into debt for it, you don't need it.

...there's that dammm common sense and logic again!!!!