Walker’s Wholesale Houses

And finally [week of February 8, 2009] The PMI Group of San Francisco announce it won’t insure mortgages originated by mortgage brokers!

If that’s not punative…I don’t know what is. This could be the last straw for mortgage brokers. How is a mortgage broker supposed to make a living only doing loans that don’t require mortgage insurance?

via Mortgage Brokers Get The Final Dagger In The Heart.

There are several other good articles here about the fact that mortgage brokers as an industry are getting cut out

• Mortgage Brokers Getting All Time Low Of Origination Market Share
• Are Mortgage Brokers An Endangered Species?

Beginning April 1, 2009, it’ll be tougher to qualify for a loan without having to pay increased fees.

Sure, they changed the rules to back to investors being able to get 10 loans, but the qualifications are ridiculously strict.

What do you think are the implications for your retail buyers?

Under Fannie’s (Federal National Mortgage Association) and Freddie’s (Federal Home Loan Mortgage Corp.) new guidelines, even applicants who assumed their FICO credit scores would get them favorable rates will be charged more unless they come up with down payments of 30 percent or more.

For example, a buyer with a 699 FICO score who can bring a sizable down payment of about 25 percent to the table will now get hit with a 1.5 percent “delivery” fee at closing under the new guidelines.

A buyer with a FICO score between 700 and 720 will pay an extra three-quarters of a point. Even someone with a 739 FICO — once considered a platinum guarantee of the best rates available — will get dinged with a quarter-point add-on.

via Fannie Mae, Freddie Mac to hike fees | Richmond Times-Dispatch.

The rules go on to share that condos will require 25% or receive a .75% penalty fee, no matter how high their score is.  Duplexes that are owner occupied on one side, and rented on the other, will get a 1% point charged.

Cash out refis will be charged up to 3 points (3%).

Of course, realtors are mad.

Real estate investors who are remaking homes available to first time home buyers are finding that it’s not the availability of buyers that is the problem.  It’s Fannie and Freddie making it darn near impossible to get a qualified buyer.

So what?

This suggests that a flood of lease options might be your exit strategy — buyers who cannot get funded now, but when the credit markets stablize, they might.

What do you think?