I received a this today from one of my lenders and I thought I should post it exactly as I recieved it.
Chad
Good Afternoon Everyone,
As you know the new rules for government-backed insured mortgages are set to come into effect April 19th, 2010.
I have been getting some feedback from our underwriters, that I wanted to share with you.
It appears that it is getting more and more difficult to get deals approved by our insurers at the 95% level for refinances. For the most part it appears that only deals with exceptionally strong beacons of over 680 are being considered. Refinancing to 95% to ease over use of credit is not being viewed favourably. Many applications are being declined due to high debt load or credit at limits.
Insured rentals (over 80% ltv) is another product being phased out on April 19th and we are currently seeing a large number of declines coming back for these submissions as well. Only exceptionally strong applications are making it through.
No changes have been announced to the BFS Simplified Program or the Flex Down Programs, however these programs also seem to underwritten now without any flexibility resulting in a higher percentage of declines.
I wanted to pass this info along just so you are aware that you should be proceeding with extreme caution on these types of applications. What was previously a “slam dunk” deal may today be declined without any negotiating or escalations available.
Now would be a good time to remember that it is always better to under promise and over deliver.
As always, please give me a call, if you have any questions or concerns.
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