Well, what a difference a day makes; or more precisely, 36 days. When I last wrote about an almost flawless transaction with a 100% No-Fee loan from Bank of America I felt almost smug. My client’s success silenced the skeptics. And, the U.S. subprime mortgage market woes appeared to be limited to buyers with low credit scores.
Since then we have been bombarded with national and local news stories about the still weakening housing market, the increase in foreclosures, the Beazer Homes scandal and the tightening of financing qualifications for home loans. It didn’t hit home until this past Thursday. One of my buyers was set to close when they were informed by Bank of America that the 100% No Fee loan they had applied for originally was no longer available.
What does this tell us about what has happened in the past month?
- Bank of America’s No Fee program became so popular that they couldn’t handle the demand and their service level dropped to just short of total failure.
- The days of 100% loans may be gone, even for those with great credit.
- When the national trends and issues get to a certain level they touch every market, including Lake Norman
Luckily, my clients were able to work with Bank of America and we closed yesterday, on time, with a 100% No-Fee Loan. But, I don’t recommend that others count on this in the future!