Underwriting Changes at Chase
Posted January 14, 2008
Chase, one of the leader wholesale lenders, has announced some big changes and modifications to their product line up.
- Here are a few of the highlights:
- Elimination of their Alt A Products
- Elimination of the MyCommunityMortgage Interest Only Product
- Increase of Min Credit Scores for Non-Agency 30 and 40 year loans and Interest Only Loans
- Elimination of 100% Combo loans - Max combined max combo loans ( 95% Agency, 90% non-Agency)
- Elimination of all Non-Traditional Credit
- Elimination of internal underwriting of stated income loans
- Major changes to products in “declining markets” (which Charlotte is NOT!)
These changes are being made in light of the lack of investor confidence in the marketplace. Unfortunately, the investors pay too much attention to the mass media that seem to just enjoy touting how the sky is just falling!
To the average person, here’s what this means:
Chase, as one of the larger lenders has decided to focus their loan products mainly on Fannie Mae type loans. This means that if they underwrite their loans according to the conforming Fannie Mae guidelines, they will most certainly have a place to sell that loan. Their other products (the Alt A and “non-agency” loans are loans that they sold on the secondary market to investors, or holding themselves. These are slightly riskier loans and those funds have dried up for now.
A special note for potential home buyers and homeowners needing to refinance:
Get off the fence if you are sitting on it. Rates and low, selection is high and products are still there. This news only shows that products are getting tighter and most likely get tighter for a while longer. However, if good loans (ones not likely to default) begin to pick up in volume, this will help to turn the tide. Yes, the national news paints a bleak picture. But in all honesty, real estate is really local. What is happening in California and DC and Arizona is not happening in North Carolina. See our report on the Charlotte NC Real Estate Market.
Now is the time to buy! Get approved now, quick and easy and let’s get you into your dream home as soon as possible. Waiting WILL only cost you more money!
Related Articles
Posted in Buying a Home, Charlotte Area Info, Commentary, Mortgages
