Market Recovery...Could it Really be Here?!

Flex 97 Product M.I. Return
When the Mortgage Insurance companies decide that the market has stabilized enough to offer a product like this, it proves we are on the way back up. M.I. companies spend millions on market research, they don’t make changes like this unless that very expensive data says the rewards outweighs the risk!

Modified Guidelines
On top of returning the Fannie Flex 97, they also modified the guidelines and added a few new features that are completely in line with credit “loosening”. You can call me for further details but they are called “boarder income” & “second job or O.T. history”. Exciting stuff.

The Jumbo Market Makes a Comeback
First Jumbo bulk is a purchased by Redwood Trust Inc. for $238 Million. There has not been a Jumbo bulk sold in the private sector for several years. Redwood then announced they will buy Jumbo loans on a “flow” basis, shortly after they purchased this bulk. That means, the Jumbo market is finally making comeback.


85% Cash-Out Returns
This says two things, credit is loosening, and that investors are confident the Real Estate market is nearing recovery with regard to value. Otherwise the cash-out offering stays below 80% as investors anticipate values declining further. This is excellent news

Condo Purchase to 90% Allowed Again
The condo market has probably been beaten down worse than any other sector. For a short time, there was virtually no financing available to purchase a condo. Now, the LTV restrictions have been lifted up to 90% again. Further proof that the credit curve is loosening and the values are stabilizing.

Overlays Removed
Two of our major investors have made guideline changes to loosen the credit curve just this week. They are removing what are called “overlays” that are put in place to lower risk, tighten the credit curve and essentially they eliminate certain segments of the population from obtaining credit due to fear of default. When those are removed, it is proof that there is an appetite for mortgages and that risk is being managed properly.