Credit and Loan Blog June Archive

Buying a home has been tougher due to the mortgage crisis and the resulting credit crunch. This article describes some of the consequences of the crisis including the discontinuance and temporary appearance of some loans.

The severe losses suffered by Government Sponsored Enterprises (GSE's), Wall Street firms, and other investors across the U.S. resulted in credit tightening and the disappearance of the loan products that caused these losses. The foremost of these loan types was the high-risk, 100% CLTV 2nd mortgages on investment properties, most of which were transacted with Stated Income and Stated Income Stated Asset (SISA) documentation. This type of loan started disappearing two to two and a half years ago with credit tightening or discontinuance occurring rapidly. Additional high-risk loan programs that caused much damage were the Owner Occupied SISA and No Doc loans. Such mortgages are no longer available from most mortgage lenders.

Read more: Why Buying a Home is Tougher Now [click]

Originating Loans in Today's Mortgage Market - Part 2

As a mortgage broker struggling today, how can you prepare for the future? Here are a few suggestions:

1. Keep out of personal debt and make business debt as small as possible. Accelerate your mortgage payments so that you pay off your mortgage quickly. Purchase an automobile you can afford. Use a budget. Live within your means.

2. Build up a financial reserve. Having money saved up for emergencies both in your personal life and in your business brings peace of mind, helps you weather the storms, and gives you a better chance of surviving and making decisions based on the long-term consequences.

Read more: Originating Loans in Today's Mortgage Market - Part 2 [click]