What happened to all of the "programs"??

[debtjumper]

Officially discharged/case closed in May of '06...

In January, I was pre-approved for $195k without a problem. I make about the same income now (maybe a tad higher) and this new mortgage broker is telling me that the best I can get is $125k and 10% down. He also said that I must dump my $594/mo new truck that I bought three months ago to get a mortgage like this.

I can part with my truck without a problem, but what happend? He says that the "programs" available a year ago, six months ago, are all gone.

MTG_BANKER_OH - is this true?

I gross $3900/mo after taxes, no CC bills, no other bills (besides $65/mo cellphone), no wifey, no kids.

[FLBK7]

I think the mortgage market has simply tightened up because of all the exotic and ARM mortgages that became so common just a couple years ago during the housing boom.

I was discharged from a Chapter 7 in April 2004 and got a 100% conventional mortgage with Chase for $194K at 6.3% last December. Last week I was at Target and ran into the mortgage broker who handled the transaction. He said that because of the tightening of the mortgage market, if I applied for that mortgage today I would get either a higher interest rate or would be required to put at least 10% down.

Things are changing!

[SinkingFast]

It's definitely a sign of the times.

http://www.bkforum.com/showthread.php?t=16066

and then this,...........

http://www.bkforum.com/showthread.php?t=16485

Even the nation's biggest mortgage Lenders are struggling. That's the reason so many Programs have tightened their lending guidelines.

[HHM]

An interesting note, where I am, the realtors I know are basically telling people, if your house is worth less than $3,000,000 you can't sell it in this market. But I am in one of the hardest hit areas.

[MTG_BANKER_OH]

Officially discharged/case closed in May of '06...

In January, I was pre-approved for $195k without a problem. I make about the same income now (maybe a tad higher) and this new mortgage broker is telling me that the best I can get is $125k and 10% down. He also said that I must dump my $594/mo new truck that I bought three months ago to get a mortgage like this.

I can part with my truck without a problem, but what happend? He says that the "programs" available a year ago, six months ago, are all gone.

MTG_BANKER_OH - is this true?

I gross $3900/mo after taxes, no CC bills, no other bills (besides $65/mo cellphone), no wifey, no kids.

It is true, for the most part the best that you can do after a BK is around 10% down with less then 2 years. The market started falling apart in February-March when lenders started dropping like flies. I defintiely think the truck will hurt your chances for approval with the size of home you are looking to buy. For the most part you need to keep your debt ratio under 50% Really it should be under 45% of your total monthly income. If you make $3900 a month half of that is $1950 - your car payment $594 = that leaves you with $1356 for a total monthly payment. With the rates they probabaly quoting you on these programs that would probably put you around $125k. You should wait it out a few more months until you have been discharged 2 years and then try at that time. Some programs will allow higher debt ratios but you may be living for your house instead of living. You should do something about the car, yo uhave to figure your priorities house or vehicle.


How are your credit scores?
Was a house included in the BK?
What is your income before taxes?

[MTG_BANKER_OH]

I think the mortgage market has simply tightened up because of all the exotic and ARM mortgages that became so common just a couple years ago during the housing boom.

I was discharged from a Chapter 7 in April 2004 and got a 100% conventional mortgage with Chase for $194K at 6.3% last December. Last week I was at Target and ran into the mortgage broker who handled the transaction. He said that because of the tightening of the mortgage market, if I applied for that mortgage today I would get either a higher interest rate or would be required to put at least 10% down.

Things are changing!

This still can be done with comparable rates, you were 2 years out of the BK.

[debtjumper]

I agree MTG_BANKER_OH; ever since I purchased the vehicle, I have agreed that I cannot have both (house and a new car).

Well I paid $32k plus tax for it. It had a $47k sticker price and it is now four months old. I will investigate selling it and either making a move now or waiting six months to hit my two year mark.

Stepping back and looking at the big picture, I'm starting to see that waiting six months could be a huge difference in cash since I would be refinacing my crappy subprime mortgage anyways a year from now for a FHA.

[MTG_BANKER_OH]

I agree MTG_BANKER_OH; ever since I purchased the vehicle, I have agreed that I cannot have both (house and a new car).

Well I paid $32k plus tax for it. It had a $47k sticker price and it is now four months old. I will investigate selling it and either making a move now or waiting six months to hit my two year mark.

Stepping back and looking at the big picture, I'm starting to see that waiting six months could be a huge difference in cash since I would be refinacing my crappy subprime mortgage anyways a year from now for a FHA.

It is always better if you can get your loan right the first time and not have to refinance. Refinancing is expensive and should be avoided at all costs, unless you are looking at a 2-3 year timeframe for the refinance.

[debtjumper]

Thanks for the reply Nick. At this time I think I will wait until my 2yr anniversary date in May '08 and also try to save up 20%. After looking at many of the options, I will save a fortune by having 6 more months of patience instead of paying a fortune in high rates and fees.

A mortgage broker I was dealing with advised me that I need to start paying my rent by check instead of cash to have a paper trail for the banks and also to get a couple more credit cards. I guess some of the "investor" banks were not happy that I only have a couple credit cards active. I applied for another CapOne card (in addition to my $3k limit one) and a Chase card (both were accepted). I suppose I will make random purchases on them over the next six or seven months to make them appear to be active. Oh, I do pay my balances of every month too so I think I should be good.

Looks like home sales are still falling into the bottomless pit; at least in Michigan. Maybe next year they'll start they'll finally hit the floor... and then I can buy two houses for the price of one!

[DontBother]

More than the LENDERS not wanting to offer special program products, it's the INVESTORS who are no longer interested in buying these loans on the secondary market. The vast majority of mortgage loans are sold to investors through capital market. The rash of delinquencies and foreclosures are making the investors loose their pants. Thus, they are no longer interested in buying risky loans. No loan buyers = no loan products!