San Diego Home Loan Information

The Subprime housing market (home owners with less than perfect credit) is in terrible shape.  One of the largest subprime wholesale lenders, New Century, is on the verge of bankruptcy joining the likes of Resmae, Fremont, and Acoustic Home Loans.  Now for those not entrenched in the industry, these companies mean little, but for those of us that are know that this is horrible.  The subprime home owners (many first time) are starting to default on their mortgage loans because their ARM loans are adjusting upward and so are their payments.   Because of this, many institutional investors (HSBC,Citi,CSFB,DB,etc:) are beginning to ask the questions they didn’t bother to five years ago; and the answer is that these people should have never gotten the loans in the first place.  So long story longer, investors are scared and selling their stocks resulting in the Dow losing 400 pts. in one day and 265 in another. A certain ex-chairman of the Federal Reserve said “recession” is imminent.  Now people, he’s not even supposed to breath the word recession even if he’s thinking it.  But he said it…Everyone that owns a home or stock should batten down the hatches and try to ride out this storm.  Oh, the storm’s probably going to last four years….

The other day I was assisting a client with the purchase of her new home. Since she wanted to keep her cash we put her in a combo loan. The loan was a first lien mortgage (arm loan) and a HELOC. This common usage of an 80/20 combo loan is an effective way for a new home buyer to keep more of their cash!

Did you get all that? That is typical mortgage speak, but the process doesn’t have to be so confusing! Keep reading this blog daily and we promise you will learn all you need to know!