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Lenders In Trouble

February 28th, 2008 2:14 PM

Since late 2006, 232 lenders have "imploded". That is a huge number and tens of thousands of people have lost their jobs. As a result, the ones that are in business have revamped their underwriting guidelines considerably to take steps and ensure they will not be added to that list.

I thought you might like to know there are 17 that are currently on a watch list and recognized as being "in trouble". What does this mean to you? If you are buying a home or refinancing then, think long and hard if you need to be at anyone of these lenders. For instance, Washington Mutual (once a great bank) is now at 18 days to underwrite a new application. They have scaled back their staff and can't handle the work load. In addition, they are on the watch list due to financial troubles. Even if you make it through the process, and it will be a long one, there are no guarantees they will be in business to fund (close) the loan. Do you really need that kind of aggravation?

If you already have a loan with them, don't worry. Another lender or servicing company will pick it up if they fail. Your loan will not be "called in".

Ailing/Watch List Lenders:

17. American Equity Mortgage, Inc.
16. CTX Mortgage Company (Retail)
15. Chase Home Equity (Wholesale)
14. First Horizon Home Loans
13. Gateway Funding
12. BankUnited (Wholesale)
11. Casa Blanca Mortgage/Shearson
10. Bear Stearns Mortgage
9. Chevy Chase Bank - Wholesale
8. Washington Mutual
7. IndyMac Bancorp
6. MortgageIT
5. Sallie Mae
4. Meridias Capital
3. Doral Financial Corp.
2. Evergreen Investment+Carnation Bank
1. Residential Capital, LLC*

Please contact me if you'd like to get a second opinion. I'll help in any way I can.

Jeff Kornfeld

jkornfeld@wcslending.com

Posted by Jeff Kornfeld on February 28th, 2008 2:14 PMPost a Comment (0)

Economic News

February 26th, 2008 5:07 PM

In a bit of good news, February's Consumer Confidence Index (CCI) that was also released today showed a much larger than expected drop in confidence. The reading of 75.0 was well below the 82.5 that was expected, meaning that consumers are less likely to make large purchases in the near future.

Tomorrow begins the two day Congressional testimony by Fed Chairman Bernanke. He will be speaking to the House Financial Services Committee tomorrow morning and the Senate Banking Committee Thursday. Market participants will be watching his words very closely for any indication of inflation concerns, a possible recession and likelihood of the Fed's next monetary policy move. It will likely create additional volatility in the markets tomorrow morning.

As for economic data tomorrow, we have January's Durable Goods Orders at 8:30 AM ET. This data gives us an important measurement of manufacturing sector strength by tracking orders at U.S. factories for items expected to last three or more years. A larger drop than the 4.0% that is expected would be good news for the bond market and mortgage rates. This data is quite volatile from month to month, so large swings are fairly normal.

Posted by Jeff Kornfeld on February 26th, 2008 5:07 PMPost a Comment (0)