Some banks have started to get out of the mortgage and refinance business due to the economic downturn
In a year and a half the mortgage and refinance industry has changed so much. Before there were mortgage and refinance companies on every corner. At one point in time the mortgage and refinance industry could find some type of loan for just about anyone, now all of the guidelines have changed and the industry has tightened up.
With the mortgage and refinance industry being so different many banks have decided to leave the industry all together. We are not sure if for some of these banks this is just a temporary move or if this is a long term plan to change direction. Many of these banks have left the mortgage and refinance industry because too many people defaulted on their previous loans. These banks were not able to take the loss that these loans were producing. For the homeowners this has its ups and downs. The good part about this mortgage and refinance market is that only companies that are writing legit loans for people that can actually afford them are left in the market. So the borrowers will know that they are not getting scammed on their mortgage product.
The down side of this mortgage and refinance market is there are many homeowners or potential homeowners in the market that are not able to get the loans that they want. The mortgage and refinance requirements have gone up and the amount of products that the lenders are offering has gone down.
Now, borrowers that are interested in mortgage and refinance options will have to have a credit score that is much higher. In the past, borrowers could practically have any credit score and still get approved for a loan, in this economy the borrower will have to have a minimum credit score of 620 to receive any type of funding. This is obviously bad news for those looking for a bad credit mortgage refinance solution. Also the borrower used to be able to state their income, this was designed for people who had large write offs on their tax returns so that they did not show a lot of personal income but they brought in a lot of money. These loans no longer exist in the mortgage and refinance market. Now all lenders require that income be verified by showing tax returns for the past two years, proving that the personal income stated is at the levels that it is.