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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (83022)	8/2/2007 10:47:34 PM
From: patron_anejo_por_favor	Read Replies (1) \| Respond to of 306849

This should keep the snowball rolling downhill tomorrow: online.wsj.com Lenders Broaden Clampdown on Risky Mortgages Tightening Standards Could Worsen Slump In the Housing Market By JAMES R. HAGERTY and RUTH SIMON August 3, 2007 Jittery home-mortgage lenders are cutting off credit or raising interest rates for a growing portion of Americans, extending well beyond the market for subprime loans for people with the weakest credit records. This worsening credit crunch threatens to put further pressure on the housing market, where prices are flat to declining in much of the country. • The Trend: Nervous home-mortgage lenders are returning to more-conservative practices and are raising interest rates and cutting back on a category of loans between prime and subprime. • The Issue: The worsening credit situation threatens to put more pressure on the housing market, where prices are flat to declining in much of the country. • What's Next: Economist Thomas Lawler said he expects the credit squeeze will make "the late summer home-sales season even worse than the dismal spring season."Lenders say they are being forced to raise interest rates and stop offering certain loans because mortgage-bond investors have lost their appetite for a broad range of mortgages considered risky. That includes those dubbed Alt-A, a category between prime and subprime that often involves borrowers who don't fully document their income or assets, or those buying investment properties. Lenders are tightening standards and "raising rates like crazy," said Melissa Cohn, chief executive of Manhattan Mortgage, a New York mortgage broker. She said Wells Fargo & Co. is charging 8% for a prime jumbo 30-year fixed-rate loan that carried a 6 7/8% rate late last week. (Jumbo loans are those too large to be sold to government-sponsored mortgage investors Fannie Mae and Freddie Mac.) A Wells spokesman said rates are lower on loans made directly by the bank than on those through brokers.<snip>