OUTLOOK FOR 2014

As the year draws to a close, we can certainly say that by nearly all accounts 2013 was a very good year for the mortgage industry. (unless you were in default loan servicing).

The Federal Reserve has made things easy for borrowers by their quantitative easing policy (at least through the first 1/2 of the year) and now they are slowly backing away so that borrowers will now see interest rates a bit higher and residential home prices leveling off a bit as the market slows.

There are a slew of new laws and regulations for mortgage lenders to contend with in early 2014, one of which is the 3 independent source verification/qualification of a borrower’s ability to repay a loan. This new law that takes effect next week will require mortgage lenders to test the ability of the borrower/applicant by closely reviewing past credit / payment patterns and closely look at income sources to make sure the income is solid and verifiable, as well as look hard at other debt / obligations of the borrower to make very sure that the borrower is fully capable of making the payments on the proposed loan.

Undoubtedly the new law will result in more borrowers being denied a loan because they did not pass the stricter qualification requirement. No more reliance on undocumented income, or a promise of less use of credit cards, etc.

The new law will improve the quality of mortgage loans originated by licensed mortgage brokers and banks. It will also increase the amount of private party / seller-carryback loans for borrowers that couldn’t qualify with a conventional lender because of the new regulations.

We expect to see an uptick in privately financed mortgage loans in 2014. We are ready to handle the increase in volume on the private party loans we buy, as we have been buying them for decades. If you carry back a loan because your borrower couldn’t qualify for a conventional loan, we are still very interested in buying it from you. Call, click or fax over your information and we will get back to you usually the same day with a quote on how much your Note is worth. Happy New Year!

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