John F. Wasik: Lenders pay attention to credit worthiness
More money down
Also hurt are those homeowners refinancing loans who have no equity or money down.
Jenich said lenders are most restrictive in Arizona, California, Florida, Georgia, Michigan, New Jersey, New York, Nevada and Ohio.
That means banks in those states will require more equity or cash and offer lower loan amounts. Not surprisingly, Nevada, Georgia and Michigan posted the highest foreclosure rates in the U.S., with California and Florida showing the highest total foreclosures,RealtyTrac reported.
The trigger point for what industry experts say will be the next wave of foreclosures is November — when the next resets are scheduled — and then in April of next year.
"This will put borrowers in a straitjacket if they need to find 100 percent financing since no products will be available," says Jenich.
"More stringent"
"There's the same flight to quality that drove Treasury- bill yields down to 3 percent," says Randy Johnson of lenders' reaction to the subprime blowup. He's a mortgage broker and analyst with the consumer lending Web site www.credit.com. "It's going to get more stringent before it loosens up again."
If you are looking for a mortgage for a second home, jumbo loan and have less-than-stellar credit, you will have to look long and hard.
As mortgage lenders duck risk like beachfront dwellers fleeing an approaching storm, these kinds of mortgages have become scarcer.
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