Lenders going under

[Fernando]

MSN

It's not just appraisers having a tough time. Some lenders have gone bankrupt.

"First Guaranty filed for bankruptcy protection in the spring while Sprout Mortgage simply shut down early this summer."

"First Guaranty leaders said once interest rates started to climb, lending volume dropped and left the company with more than $473 million owed to creditors."

 

[J Grant]

MSN

It's not just appraisers having a tough time. Some lenders have gone bankrupt.

"First Guaranty filed for bankruptcy protection in the spring while Sprout Mortgage simply shut down early this summer."

"First Guaranty leaders said once interest rates started to climb, lending volume dropped and left the company with more than $473 million owed to creditors."

Thisis one of the reasons why within a fwe months, imo the feds will lower the mortgage rates - there are too many businesses and people in the RE food chain to see a mortgage lending slowdown last much longer. We will not see a big rate drop , but even if rates drop into the 6& range it would help boost lending.

 

[Fernando]

One of my good AMC went through bankruptcy few years ago.
I didn't get paid for some appraisals but when AMC formed a new company, the company used me again and gave me prior orders as new assignments.
I hope the pain going through now won't cause them to go bankrupt again.

 

[Terrel L. Shields]

The big (regulated) banks reduced their direct lending for a reason. They shifted the lending to the mortgage originators who then sold the bundled mortgages to the banks who then created the Mortgage Backed Securities (MBS). So the mortgage lenders were dependent upon volume and it is pretty much expected they will fold one by one...and it may take a month of Sundays to get your lien release once you pay off your mortgage. A former partner had to track her mortgage holder down to the Bank of Honduras to get a lien release.

 

[nachocheesefries]

Thisis one of the reasons why within a fwe months, imo the feds will lower the mortgage rates - there are too many businesses and people in the RE food chain to see a mortgage lending slowdown last much longer. We will not see a big rate drop , but even if rates drop into the 6& range it would help boost lending.

I don' t know ship about duck, but it seems like keeping rates at say, 5-7% and within that range, throttling rates up a little to slow things and lowering rates to put a little gas on the fire (multiple times a year), could keep this from happening over and over again.

The 2-3% free money thing, appears to cause over heated meltdowns and encourages people to live a debt laden life.

The Fed is not going to lower rates until employment changes. They are yelling it from the roof tops. Employment is currently not budging. Much more pain to come.