Two Years Since The Mortgage Crash- Now What !

Having been in this business for 40 years I thought I had seen it all, then CRASH! I remember it well, July 07 was the time when good loans were not bought by the " Big Boys " on Wall Street. The mortgage back securities went bust. So here we are in July of 09 and the days of the No Doc 10 % down deals are gone. I used to call them "Liar Loans" much to the dismay of my fellow mortgage bankers. The "Option Loan "is gone too. How could anyone believe that they could pay only 1.95% for 30 years is beyond me, but they did. I can not tell you how many people I would not give that loan to, only to see them later on the street and hear them tell me they went elsewhere.

So now where are we. In some ways we are better off than before. Most of the " Bad Guys " are out of the business, and only people with real jobs and real income can get a mortgage. Some of the bad players have re-surfaced under a different company name. Some have told people looking to Modify thier existing mortgage not ot make any payments and call them in 3 months. I wonder what the credit score will look like then! Like I said, I thought I had seen it all.

The Federal Goverment said they will help, but most people will tell you they seem more concerned with ways to sell cars, then homes. Maybe that is because they now have a piece of GM.

So here is where we are; No Doc Loans are still out there, and for the First Time Homebuyer, now is the time! 740 FICO scores are now the 680 scores of 07. The FHA is now only lookig at 620 FICO and above, and may move to 660. USDA loans are at 102% of the APPRAISED value, and they will do deals with a 620 FICO. REVERSE MORTGAGES are still going strong and may be the best deal for the baby boomers. This may be one way to restore some of the losses in thier retirement accounts. It is sad that many people fear what may be one of the best loans today, and the REVERSE MORTGAGE for PURCHASE is starting to catch on.

Finally, for all you Borrowers and Realtors, I have said this for almost my entire 40 years in this crazy business. "You need a License to sell Real Estate,make sure the mortgage person has a LICENSE to do mortgages" At the very least be attached to some type of banking company. Also make sure that all your borrowers are pre-approved and are always given a Good Faith Estimate of closing costs.

Remember, " People do not care what you know, but they know when you do not care "

JOE DAGOSTINO

LICENSED MORTGAGE BANKER

STATE OF NEW JERSEY

609-290-0897