As a mortgage lender, I have seen more changes in the past several months than I have in my entire twenty year career in this industry. It seems we hear nothing positive in the financial news lately and all that negative information is affecting the way we all think and feel. There is no disputing the fact that these are difficult times in the housing market with values decreasing and foreclosures on the rise. But I do feel the positive energy that comes from the knowledge of the experts in this business. They know there is an end in sight to this downturn which means there will be an upturn.
Mortgage lending has taken on a different face these days. Stricter credit standards are being adhered to and the sub prime market has pretty much disappeared. And, as we all know there is a very good reason for these changes. This isn’t all bad news. What this does is insure that the loans being made today are not putting families at a high risk of losing there homes. Government agencies like the Federal Housing Administration (FHA) are stepping up their lending and increasing their loan limits. This allows more buyers to take advantage of these programs which require less down than conventional mortgages. Granted, there are still fraudulent schemes out there in the market place and this necessitates even more changes. One in particular we are hearing about today is “buy and bail”. Homeowners are buying a new home and representing to the banks rental income on the current home that will not be realized. Once they have made the purchase, the homeowner is just turning over the keys to the old property having no intention of paying on that mortgage. Rental income will be scrutinized very closely as a result.
On the more positive side, as a Bank of America employee, I have seen our management pushing forward knowing we cannot stop lending. New products and programs are constantly being developed to meet the needs of the consumer. We are busy lending and getting poised for the up turn in the economy and housing market which is being predicted for the second half of 2009. There are still great opportunities for first time homebuyers and conventional rates are still at historic lows. I think what we will see as a result of this “financial crisis” will be stronger more secure lending institutions which can only benefit us all.
Mary Hendrick is a guest contributor with Bank of America Mortgage. She has over 20 years of financial experience and we encourage you visit her personal website at Mary Hendrick - BOA. Or, give her a call at (207) 874-5531.
Posted by: Mary Hendrick
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