Mortgage Industry Changes After Collapse
November 11th, 2008 Posted in Did You Know?, Mortgage InfoMortgage Industry Changes
Below is video from my Phoeinix Channel 12 interview. Sure, they spent an hour with me, but never showed me (bummer) BUT…my name is mentioned as well as a brief recap of our discussion. So, that was great!
Mortgage companies are re-evaluating how they lend money to avoid future housing collapses, and industry experts say home buyers may have to fill out extra paperwork and even take classes to get the loans.
Dean Wegner, a mortgage originator from American Financial Lending, says banks will always offer traditional 30-year fixed-rates for people with substantial down payments, but the companies are considering changes to discourage other borrowers from defaulting. “The zero-down, the stated income - you are going to find a lot more strings attached so we don’t get in this mess again,” said Wegner.
Wegner explains loans of the future may include mandatory home buyer education, such as a class explaining financial terms and borrower responsibilities. He also says home buyers should expect longer contracts detailing all the potential loss and foreclosure workouts upfront. Buyers could even see shared equity mortgages. Owners would face less up front costs in exchange for paying a percentage of home appreciation or profits when selling. Wegner says federal HOPE loans are already requiring shared equity.
Bette Zerba, GRI Re/Max Desert Showcase Realtor
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