Naples Real Estate News - 09/06/07
Is your closing in jeopardy of not closing? Congress wants to ease the crisis, but they don’t agree, but are they on track?
NATIONAL CLOSINGS - Homes may be going under contract, but they’re not all closing. A survey of 1,700 mortgage brokers by trade publication Inside Mortgage Finance found that one-third of home loans originated by mortgage brokers failed to close in August; and nearly half of borrowers with ARMs couldn’t refinance. If you are considering a purchase of Naples real estate, Bonita Springs real estate, or Estero real estate be sure to talk with your loan officer or mortgage broker to insure the loan program you applied for is still available or if you still qualify for a loan.
MORTGAGES - Congress wants to ease the crisis within the mortgage industry but doesn’t agree how to do it. One proposal would bar lenders from steering borrowers to high-cost products and impose penalties for early repayment. Another proposal would allow lenders to grant ARMs based only on a borrower’s ability to pay after a rate reset.
The imposing of pre-payment penalties would not be good as it prevents borrowers from refinancing due to the amount of monies owed at the closing of the refinancing.
Qualifying a borrower at the rate when the rate is reset, is probably a good idea, as long it is clearly defined. ARM’s are based upon an index with a margin. Who can predict an index sometime in the future - maybe they meant to think about the cap at the time the interest rate is reset - if the loan has a cap!
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