Well it’s August of 2006, and the industry is really grinding to a halt. It seems that a lot of shops have closed, and companies have finished their downsizing, with many companies either being halved, or completely sold off. Our subprime division shut its door a few months ago, and who knows what’s coming next.
The market is just flat. The only deals that come around these days are fraud-ridden, or unqualified borrowers who shouldn’t be in a house. You know, the first-home homebuyers that are buying $1.1 million dollar homes as their first piece of property. Seems a little steep for your first endeavor, but that’s just me. Sure there are still clean deals here and there, but it’s not like two or three years ago when deals were automatic. They’d fall on your desk and all you had to do was get them underwritten.
Not only is there a lack of business, but also a tightening of policy with Fannie and Freddie that has driven banks and mortgage lenders to produce stricter guidelines. Files that would have closed last year are now being met with a definitive decline notice. All the files that slipped through the cracks when the refinance boom was in full swing are getting audited, and the overall quality of loans has diminished.
So we’ve got a slow market full of fraud and bad deals. Everyone who was going to refinance has done so, and the only people that seem to want to get in on this market now are under qualified. So what do we do now? Hope for another boom? Some say it will happen sooner than we think. Either way, it’s always a good time to learn more about this cyclical industry, because it’s not a matter of if, but when the market will rise again. And the more you know, the more money you can save.