The mortgage industry is taking it on the chin ! Regardless of your opinion, we are watching lenders drop like a palooka to a 19 year old Mike Tyson and it is starting to affect how we do business.
The most interesting development was the fall of American Home Mortgage and their subsidiary, American Brokers' Conduit . This firm was not involved in the sub-prime market yet it underwrote loans that were not bought by Wall Street.
I often advise new borrowers to get a signed mortgage loan commitment, showing the expiration date of the lock. That "commitment" now has to be analyzed for the financial solvency of the funding/purchasing lender. I'll be practicing a strategy of dual submissions until this liquidity crunch clears. At present, if you are applying for a loan that isn't a FNMA/ FHLMC loan, the rate lock you have is just an indication of interest by the lender.
E-mail me (upper right hand side of the site) for instructions about how to safely mitigate the risk of your lender bouncing a check at closing.
