The New Sub Prime Lenders
As I’m sure you know, sub prime lenders disappeared as a result of the financial melt down in 2007 and 2008. While few “experts” predicted that sub prime loans would just be the beginning, many other mortgage loans including “prime loans” would follow suit. The reality of the situation and in a nut shell why things came apart is this. As a result of eliminating Glass-Stegal, other laws and extremely poor oversight by the “watchdogs”, that time was like the lawless ‘wild west’ where instead of the fastest gun, it was the fastest loans and loan packaging. Well as they say, the rest is history. But wait! (Sorry, just had to say that.)
What many people don’t realize is there’s a new sub prime lender in town and you may even know one personally. Huh, personally? Yep, you may even live next door to one. So, how’s that. The answer is simply this. In order for home (and commercial property) sellers to sell their property, they are offering some pretty attractive home mortgages, including no money down loans, low interest rate loans, no credit check mortgages, poor credit mortgages, no income verification loans and in many cases loans with many or all of the above features.
So if you still are in the market to buy a home or commercial property and can’t qualify for a conventional mortgage, I’d encourage you to as the Brits say “Get crackin.” The reason for my urgency is as I understand it, the Federal Reserve through the Dodd-Frank bill may make it virtually impossible for homeowners (not sure about commercial sellers) to give a mortgage loan to prospective buyers. Don’t even get me started on what I think of this move. These new “sub prime lenders” may very well go the way of the previous group of sub prime lenders and soon.
So while Ma and Pa sub prime lender may not do a sub prime refinance or a sub prime commercial mortgage refinance, they may at least for a short time be your only hope of buying your dream home if you can’t meet the ever-tightening conventional mortgage lending standards. Ladies and gentlemen, start your engines.
Lastly if you are looking to buy a property with the help of owner financing, check out my blog post “Home Buying with Bad Credit Tips”. Good luck.