Post by jeffolie on Aug 3, 2007 11:02:19 GMT -6
Lenders Broaden Clampdown on Mortgages
By The Wall Street Journal
Last Update: 11:46 AM ET Aug 3, 2007
Jittery home-mortgage lenders are cutting off credit or raising interest rates for a growing portion of Americans, extending well beyond the market for subprime loans for people with the weakest credit records.
This worsening credit crunch threatens to put further pressure on the housing market, where prices are flat to declining in much of the country.
Lenders say they are being forced to raise interest rates and stop offering certain loans because mortgage-bond investors have lost their appetite for a broad range of mortgages considered risky. That includes those dubbed Alt-A, a category between prime and subprime that often involves borrowers who don't fully document their income or assets, or those buying investment properties. Notably, (AHM : american home mtg invt corp com
Last: 0.74-0.71-48.97%
12:40pm 08/03/2007
AHM0.74, -0.71, -49.0%) American Home Mortgage Investment Corp., which stopped making loans earlier this week, said late yesterday it would cease most operations, slashing its work force to about 750 from more than 7,000.
Lenders are tightening standards and "raising rates like crazy," said Melissa Cohn , chief executive of Manhattan Mortgage, a New York mortgage broker. She said (WFC : Wells Fargo & CompanyWFC34.06, -0.36, -1.0%) Wells Fargo & Co. is charging 8% for a prime jumbo 30-year fixed-rate loan that carried a 6 7/8% rate late last week. (Jumbo loans are those too large to be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.) A Wells spokesman said rates are lower on loans made directly by the bank than on those through brokers.
www.marketwatch.com/news/story/lenders-broaden-clampdown-mortgages/story.aspx?guid=%7B17A04224%2D46C3%2D4D7E%2D8ACA%2D25AE2AAF1339%7D
By The Wall Street Journal
Last Update: 11:46 AM ET Aug 3, 2007
Jittery home-mortgage lenders are cutting off credit or raising interest rates for a growing portion of Americans, extending well beyond the market for subprime loans for people with the weakest credit records.
This worsening credit crunch threatens to put further pressure on the housing market, where prices are flat to declining in much of the country.
Lenders say they are being forced to raise interest rates and stop offering certain loans because mortgage-bond investors have lost their appetite for a broad range of mortgages considered risky. That includes those dubbed Alt-A, a category between prime and subprime that often involves borrowers who don't fully document their income or assets, or those buying investment properties. Notably, (AHM : american home mtg invt corp com
Last: 0.74-0.71-48.97%
12:40pm 08/03/2007
AHM0.74, -0.71, -49.0%) American Home Mortgage Investment Corp., which stopped making loans earlier this week, said late yesterday it would cease most operations, slashing its work force to about 750 from more than 7,000.
Lenders are tightening standards and "raising rates like crazy," said Melissa Cohn , chief executive of Manhattan Mortgage, a New York mortgage broker. She said (WFC : Wells Fargo & CompanyWFC34.06, -0.36, -1.0%) Wells Fargo & Co. is charging 8% for a prime jumbo 30-year fixed-rate loan that carried a 6 7/8% rate late last week. (Jumbo loans are those too large to be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.) A Wells spokesman said rates are lower on loans made directly by the bank than on those through brokers.
www.marketwatch.com/news/story/lenders-broaden-clampdown-mortgages/story.aspx?guid=%7B17A04224%2D46C3%2D4D7E%2D8ACA%2D25AE2AAF1339%7D