Question:

Why are many mortgage lenders closing down?

Answer:

Due to the collapse of the mortgage market, there are a lot of mostly subprime mortgage lenders closing down, or filing for bankruptcy. In either case, there are thousands of people laid off on the street.

Even though the failure of subprime borrowers to repay their loans is considered the main reason for mortgage lenders shutting down businesses, there are a few signs (and concerns) that it is also upper class citizens who seem to experience financial hardships.

How do mortgage lenders try to prevent closing down?

Basically, lenders raise credit requirements and turn down loan applications for high LTV loans. The element of risk has been eliminated from a mortgage application. Stated income, low credit is impossible to find for no down payment financing.

Government attempts lowered the prime rate several times and some government-backed mortgage programs have been modified or created anew to help alleviate the foreclosure levels and allow borrowers to refinance to better, more affordable terms.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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