Coastal Real Estate and Lifestyles

This just in from Half Moon Bay office of Princeton Capital Mortgage consultant, Susan O’Driscoll:

Countrywide:
No longer doing any 2nd mortgages that are not combined with their 1st mortgages.
It used to be that you could get a 1st mortgage from Wells Fargo (for example) & 2nd mortgage from Countrywide.  No more.  The only time Countrywide will issue a 2nd mortgage is if they are doing the 1st, at the time of purchase. They will no longer do HELOC’s as stand alone transactions.  Note:  I have a client with a $850,000 HELOC with Countrywide. They have a $40,000 balance at the moment. Countrywide wrote them a letter to inform them that are cancelling the HELOC.  No discussions, no modifications, just closing it.  Borrower will be allowed to pay back the $40k over 30 years.  Expect to see a lot more of this with equity lines either as part of a purchase or as loans after close of escrow.  Also, please keep in mind that it will become harder to obtain an equity line after buying a home.  So, for those folks who are considering a large downpayment and then intend to get the money back (for repairs, or whatever) via an equity line, be aware of this in your planning.

Chase:
Chase will now only allow up to maximum 75% loan-to-value of the property.

Wells Fargo:
The same applies to Wells Fargo with respect to their 2nd mortgages as described above with Countrywide.

I guess the thrust of all this is Mortgage Insurance may be making a comeback.

MB’s 2 cents…Bottom line is work with a mortgage professional you know or a trusted referral and ask questions to understand your product.  We are fortunate to have several excellent professionals here on the Coast.  I also work with Ed Diaz (spanish/english) and Sam Siew (chinese/english).  The mortgage industry is continuing to work through needed changes.  Even with these changes, you might be able to get into your first or dream home sooner than you thought.