In response to growing industry-wide concerns regarding the uncertainty in today's secondary market, effective Monday, August 27, 2007, SunTrust Mortgage is eliminating the Combo 100 loan program.
So what does this mean to Minnesota Realtors?
Fewer borrowers will be able to buy homes.
Sun Trust is just one of many lenders who have been cutting their high loan-to-value programs lately. I would say by the end of September, there will be few if any options for people who don't qualify for conforming financing, Fannie Mae or Freddie Mac, and who don't have any money for a down payment. This is a category known as Alt-A and it is quickly disappearing as investors are running for cover as home values are flat or declining in many markets. The 100% financing category, while still alive through Fannie Mae and Freddie Mac, will all but disappear in the Alt-A and sub-prime markets. As a result, fewer people will be able to qualify to buy a home.
Now more than ever it is important for Realtors to quickly refer their buyer prospects to a capable mortgage professional for pre-qualifying and preferably a broker who has access to many different lender just in case the lender they are using goes out of business or cancels the mortgage program your buyer was qualified for.
For more information about which types of mortgage programs are still available and which are gone, contact Ken Horst at 952-842-8100.
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