Tuesday, May 31, 2011

Banks that are doing it right

   As we all are aware, the mortgage lending environment is a mess. The reasons have been alluded to time and time again in print, radio, television and on line.  We have heard the terms ad nauseum- securitization, Fannie and Freddie, liar loans, secondary market, etc.  You are hard pressed to come up with an article or story with a positive spin on this industry.  Well, let's change that, shall we?  Here is an insider's account of who is doing it right, so to speak.  But first, a little background.  I have been on the front lines of the mortgage game for the past 10 years and I have seen just about everything there is to see.  In just the last 4 years, I have seen the pendelum swing 180 degrees. Banks went from offering people with a pulse 100% financing, to declining borrowers with plenty of equity, perfect credit and 7 figure bonuses.  I have a saying that I believe explains the dichotemy-banks were acting completely irrationally at one end of the spectrum.  What makes you think they will act rationally at the other end?  Yet, there are some lenders out there that have and continue to pursue the proper path.  Here are a few of them:

HUDSON CITY SAVINGS BANK- This New Jersey based bank has maintained a simple philosophy throughout the crisis and that is common sense underwriting.  Underwriting is NOT credit score driven unlike almost all other banks. the totality of the credit report is taken into account.  Once the commitment letter is issued, it is basically free and clear of conditions.  Rates are very competitive and they do allow financing up to 90% in some cases.  They do NOT allow financing on co op units.

ASTORIA FEDERAL SAVINGS BANK- Strangely enough, this was  a lender that I was very hesitant to send loans to many years ago.  Now, they are my first choice if the borrower qualifies.  Conservative to their core, they too maintain common sense underwriting.  They do have post close reserve requirements that are tougher than most lenders but if the loan fits, they are terrific.  Extraordinarily good ARM rates.

Don't get me wrong, there are others out there as well that are very good.  I wanted to give a small sampling.

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