First the lenders yanked products off the shelves, now the Mortgage insurance companies are joining suit. The largest mortgage insurer of home loan announced earlier this month that they will no longer be providing coverage on popular programs in large areas of the country. Of course, the entire states of Nevada and California is included in this area.
Some of the scenarios that will no longer be available for mortgage insurance coverage, LTV’s over 80%, are cash out refinances, reduced documentation, mortgages with less than 5% down payment, and no owner occupied properties. In addition to this if you are putting 5% down you now need a minimum FICO score of 680 as opposed to 620.
The bright spot in all of this is of course FHA with low mortgage insurance and a requirement of only 3% down. Since the loan limit in Washoe county is $367,750 most purchases will qualify using this program.
A word of long term caution in regards to FHA. While congress seeks to solve problems short term , with the possible down payment requirement of FHA being reduced to 1.5%, form a long term picture FHA has become the new sub prime and eventually these guidelines will have to tighten as well as non-performance of these loans increase.
Please let me know if you have any questions. The lending environment continues to shift and change daily. The good news is that I am beginning to see some programs return from Indymac Bank to the Retail Lending group. We will be able to do a manufactured FHA again soon and our Jumbo products are being enhanced.
Have a wonderful day
Lisa Fleck, C.M.P.S.
Senior Mortgage Planner
Indymac bank Retail Lending Group
5470 Kietzke Ln Suite 210
Reno, NV 89511
775.332.1434 phone (direct)
866-481-0540 fax
lisa.fleck@imb.com
www.thefleckgroup.net
