JohnsBlog (articles, news, thoughts, advice)

The 2nd largest privately held home lender, First Magnus, has announced they will no longer be taking loan applications or funding loans.  Joining American Home Lending and New Century as major companies that have run out of options---and time--- in the recent mortgage crunch. 

In addition to these major players, there have been thousands upon thousands of layoffs over the past few months, raising initial jobless claims to the highest levels seen in a while.  Many subprime lenders have closed their doors, often times declaring bankruptcy and raising the white flag after a few years of lackadaisical lending guidelines holding a strong place in the market.

Even major lender Countrywide is showing signs of weakness and trouble, today withdrawing $11.5 Billion--the entirety of their available credit lines from major investors on the market...this is a last-ditch effort, and hopefully they'll pull through...though saying that their lending guidelines will be strict is more than a slight understatement...perhaps their new slogan will be "No one can do what Countrywide did".

Good news is that there ARE lenders out there doing okay, acquiring the weaker lenders, and gaining market strength.  These lenders may have been disliked by brokers due to their strict guidelines in the past, but these guidelines are what have them still up and running in a market that has imploded over the past 8 months.

I work with many of these lenders, and its nice to see that in a struggling market I can do many of the same things I could a few months back, just by falling back on different avenues of lending.  Where subprime used to carry a majority of power, FHA and community programs have stepped up to the plate.  Expanded approvals allow for close to subprime rates on Fannie loans, and I haven't seen a huge fallout of loans due to these other options. 

Now for a little self-serving promotion---its even nicer to know I work for a company that has used strong lenders over the past year and will continue to do so.  Stonebridge has not greatly been affected by lenders falling out of the market, as our lenders have incredibly strong financial backing and have always been responsible in their lending guidelines.  Though I can no longer offer somone with a 580 credit score 100% financing on a cash out refinance despite their repeated credit and mortgage delinquencies, I can STILL offer a client funding if the loan makes sense.  My company has been strong enough and smart enough to not only weather the storm, but continue to grow throughout a shrinking market.  Hopefully as this beast of a market continues to bear its teeth, the weak will be weeded out and the strong, responsible, and best lenders and brokers will be left standing to help restore the market.

PS..Ill be here awhile.