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Thursday, August 02, 2007

More on 'Major Changes' in Home Lending

by Calculated Risk on 8/02/2007 06:49:00 PM

Bloomberg covers the IndyMac CEO's letter to employees, and mentions the following lenders: IndyMac, Rivals Make `Major Changes' in Home Lending

National City ... the 16th-largest home lender last year ... In its Aug. 1 notice ... said it won't buy loans that can't be resold to Fannie Mae or Freddie Mac, the two largest mortgage buyers, unless the borrowers' income and assets are fully documented.

... Wachovia, the seventh largest home lender, discontinued making Alt A mortgages through brokers because ``it's becoming more difficult to sell these mortgages in the secondary market as the financial markets continue to tighten,'' spokeswoman Christy Phillips-Brown said.

... Wells Fargo & Co., the second-biggest lender, said last week that it would no longer make subprime home loans through brokers, while continuing to make them in a retail channel.

... SunTrust Banks Inc., the 14th largest home lender, has ``pretty much gotten out of Alt A'' for now, said Sterling Edmunds, who heads its mortgage unit.
I expect the impact on home sales, from these 'major changes' in home lending, to show up first in the Census Bureau's August New Home sales report (released in September), but not show up in the NAR's existing home sales report until the September report (released in October).