I recently spoke with a mortgage broker who talked to a bunch of us at the office.
Time is money so I'll get right to it.
We all know how the collapse of the sub-prime market has effected many buyers, and thus sellers (because they can't find any qualified/approved buyers) due to increased lending restrictions.
However, he went on to discuss the core issue that faces many lenders - lack of liquidity. The lack of having enough money (for a banker) to lend cash out to finance more real estate transactions has really impacted all types of buyers. A "conforming loan" is a mortgage amount that does not exceed (currently) $417,000 (single-family). For more information you can just use a search engine and search, "conforming mortgage amount".
Anyhow, with the fall out from the sub-prime market, brokers are finding that many of their lenders lack liquidity to fund financing because the investors that were buying the mortgage-backed securities have pulled the rug out from the entire market, see http://ml-implode.com/ to get information on the 166 mortgage lenders that have shut down recently.
Now the lenders that are surviving this mess find themselves in a painfully interesting situation. For single-family homes, where the mortgage amount exceeds conforming limits ($417,000), even with over 20% down and "A paper" applicants, the fact that the deal does not acheive a conforming status, many lenders are denying "jumbo loans". Additionally, because we're witnessing a general lack of liquidity in the marketplace, lenders just don't have the cash to lend.
I just thought this was a very interesting piece of information. I'm finding that when I discuss this with clients, they really appreciate the insight. I've spoken with several clients who have their home on the market in the higher-end range who mistakenly thought the people who would buy their home (say around 1 million dollars) would have "no problem" with financing the deal. With this piece of important information, they've really responded by thanking me and I've gotten several appointments from these conversations.
Another example of why it's so important to keep re-educating yourself. The market waits for no one. If I'm "armed" with up-to-date information that my competitors lack, I'm that much more likely to increase my business.
Also wise to keep up to date with the hubub on Wall Street, since they back the loans. Conforming limit increases should help very soon.
It is always important to keep continually up to date with trends, knowledge, and just general information, it is what can set you apart from the competition!
i can't figure out why some blog posts get posted on alot and others don't. like some blog posts are (in my opinion) TOTALLY USELESS, yet 100 people will post on it...lol
i mean this is good information. it's not written perfectly but who cares, this is about information, not writing skills.
my clients don't care if i can spell, as long as i can spell their name, the buyers name and get through a contract and get them top dollar!