Earlier this week, American Home Mortgage (AHM), one of the largest lenders in the USA, lost their funding for loans, meaning buyers mortgage commitments were pulled at the last moment. One of my clients was doing her walk-thru of her purchase just hours before settlement when she was notified. She has yet to close, as she was forced to re-apply through a different lender.
Rumours are swirling about other lenders being in trouble, as years of mismanagement, forcing through loans which should have never been approved, and sticking consumers with risky types of adjustable and negative amortization loans has finally caught up with them. Match this with the slowing market and a high rate of foreclosures, and voila, buckle your seat belts, it’s going to be a wild ride for the mortgage industry for the next 12 months.
Slower markets always seem to have a way of flushing out a sewage of corruption and stupidity.