Real Estate Finance Alerts

If you are self employed or need a stated loan program, you must refinance now if you need to lower your rate, move from an ARM to a fixed rate loan, or consolidate debt.  Additionally, if you are looking to purchase a home you may need to adjust your time lines and buy now.  Otherwise, you may not be able to do so in a few weeks or months because of the following changes.

Over the past few weeks, most lenders increased the rates and raised the minimum requirements for their stated loan programs or even eliminated them altogether.  The result is that a stated income loan today has a rate about a quarter point higher or more, requires a higher credit score, and lower loan amounts compared to even just 2 weeks ago.  More importantly, many lenders already canceled their stated loan programs, several others are eliminating their programs this week or in coming weeks, and many others are planning to follow suit.  The question is not if conforming stated loans will go away, but rather when they will go away.

The changes and elimination of stated loan programs is the direct result of current market conditions and a lack of demand by investors to purchase these types of loans.  Many lenders simply cannot find buyers for these loans even after raising the rates and minimum requirements.  Therefore, they have to cancel the loan programs until the market changes.  Eventually, stated loans will come back, but not as they existed over the past five years.  Future stated loan programs will be much more restrictive and expensive and there is no telling when they will be available.

Anyone who needs a stated loan program to refinance or purchase a home should evaluate their situation immediately and act now.  Tell all of your friends and family about these changes.  It will be too late to do anything by the time they hear about this on the news or in the papers.  The story will then be about people who planned to refinance or purchase a home but can no longer do so.  Can you still qualify for a stated loan?