A quote and a link from Damion Matthews…to an article that is quite representative of a lot of what is going on in some parts of the city, and not at all representative of a lot of what is going on in many parts of the city. Get that? ;-) Read it again.
In and around San Francisco, where the median home price is about $1.1 million, the tougher financing environment has created a “hesitancy” and has led to some canceled escrows for buyers around the $1 million range, said Rick Turley, president of the San Francisco and Peninsula Region for Coldwell Banker Residential Brokerage.-Rick Turley, president San Francisco & Peninsula Coldwell Banker
–Subprime Mortgage Woes Spreading [Forbes.com]
The hesitancy may be real, but it is not justified from a technical standpoint. as usual in this age of multimedia, the media is creating much of it’s own news. Here are the facts.
1) as reported on thefrontsteps about a week ago, the actual number of loans in foreclosure is less than 1% of the total amount of loans. So, while there is a small problem, I think that the media made it a much bigger problem that it actually is.
2) With the exception of the 30 year fixed, rates now are the same or 1/8th of a percent higher than they were at the beginning of the summer, depending on the product.
3) There are now four lenders that have competitve rates, and rates of the big banks are coming down out of the clouds, so we hope they get back in the arena in the next month or two.
4) Turn-around times for purchases at the competitive lenders are between three and four weeks because of their high volume. I talked to one today that had 400 loans in their pipeline!
Scenario: 1.25 Mil purchase, unverified (stated) income, 700 credit score. Financing: 10 percent down required (125,000), first (1,000,000) 7-yr fixed (interest-only) at 6.750 no points, fixed second (125,000). A line-of-credit second (which is interest-only) would be 9.125%.
So, contrary to what you might think when you’re listening to the news, we (loan brokers) are doing a lot of purchases and refis at excellent rates.