Countrywide Financial Corp. said Tuesday that last week’s half point Fed rate cut has led to a 40 percent increase in the number of customers inquiring about their mortgage financing options.
However, the question remains whether many of those inquiries will actually lead to increased loan originations for the beleaguered lender.
Unfortunately, reduced financing options coupled with harsher underwriting standards have shut many potential homeowners out of the market.
The lower rates really do little good if a borrower isn’t able to obtain the financing they need, or if their loan amount exceeds the conforming loan limit.
Most jumbo loan rates for the very best customers providing full income documentation and sporting stellar credit scores are pricing above 7%, while stated income jumbo loans are pricing at 7.5% and up.
Sprinkle in some imperfect credit or limited asset verification and home financing will likely be unattainable for many potential borrowers.
According to Countrywide, more than 17,000 loan modifications have been completed this year, on pace to alter loan terms for roughly 25,000 borrowers in 2007.
In a company press release, Steve Bailey, Senior Managing Director of Loan Administration said, “Our number one priority is to help borrowers stay in their homes.”
Recently, Countrywide began offering more conforming loans while significantly limiting what many consider higher-risk loans.