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Randy Vickers
Randy Vickers is the owner of Priority Mortgage Corp of Wichita, which opened in Jan. 1989, is the oldest locally owned mortgage company in Wichita. Randy has been in the real state business since 1983 and is a licensed real estate broker as well as a licensed mortgage broker. Priority Mortgage Corp of Wichita KS Lic #1996-0122. Randy can be reached at 316-721-7700
Real Estate
2007-09-01 09:59:00
Is it really hard to get home loans now?
Answer: Recently, the mortgage business has been on the front page of the newspapers nearly every day. Some of the largest lenders in the United States are having cash flow problems as they try to stabilize the credit markets. The market for ‘B’ loans, or sub prime loans, has moved into hard times, as Wall Street investors are no longer comfortable with the credit quality of these types of loans. In the past, these loans were packaged and sold as mortgage backed securities, to investors and mutual funds. However, in the last year or so, there have been larger than normal numbers of foreclosures on these types of loans, which has damaged the performance of the packages. In the past 5 years, more and more mortgage companies worked the sub-prime market, as the margins were higher, and the revenue that was generated was usually higher than on ‘A’ credit buyers with conforming loans. The good news was that more and more people were allowed the opportunity to own a home. The bad news is that many of these families cannot afford the payments on these homes as the rates are now beginning to adjust upwards, and they have no, or very limited options for refinancing those types of loans. This begins the domino effect, which depresses the housing market, tightens credit, and leads to more foreclosures. Those lenders who are, and have been, in the conforming lending market, and who deal mostly in Freddie Mac and Fannie Mae products, along with FHA and VA loans, have not seen nearly the level of problems being seen right now in the sub-prime markets. In Wichita, new and re-sale home purchases and the lending associated with them has continued to be strong, and the Wichita market appears to be in very good shape. Interest rates on conforming loans are still very affordable, currently holding pretty steady in the mid 6% range, which allows many home buyers to be able to afford to make that home purchase. Wichita lenders who have been through these types of cycles will be ready to serve homebuyers during this period of unsettled markets. As always, hindsight is always pretty good. But to many of the lenders who have been in the business for many years, witnessing these cycles in the business, a contraction such as this should have been seen on the horizon, as the mortgage industry grew and expanded at a very rapid rate for many years now. Although some of the national lenders will have some effect on the programs for some of the home buying consumers in Wichita, for the vast majority of local home buyers, there is no valid reason not to make that next home purchase with the knowledge that there are still plenty of great loan programs that will take care of their needs, and provide the financing for your next home. More next month...
 
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