Today, nothing follows the usual routine. Mortgage companies are being unable to advance the required sum to bona fide borrowers at the last-minute. 117 renowned mortgage companies have downed shutters in the past six months. Those remaining in business have raised their standards for advancing loans. Previously, the going was easy.
Lending companies did not even check stated income. But now a new group are helping people mop up the stains in their past credit history so that they can qualify for a loan.
It is telling on the mortgage industry. For instance a particular firm, which normally managed 50 to 70 loan applications, is now sifting through only seven. Three to four loans can be processed in a day. It spells bad news for mortgage industry. There is not enough work.
Foreclosures are steam rolling through the country. More and more sub-prime loans given out to risky borrowers are failing. Millions of interest-only loans are ready to reach the end of the grace period this autumn and winter.
It’s a storm brewing. Fauquier has weathered it better than other but it too is not without battle scars. In the last six months of last year, the damaging figure was 7.
But the first half of 2007 has seen 48 more being added to the number. In Prince William County alone, the number last month was 900. A sample survey indicates that the same trend is occurring in Fauquier, although not quite as badly as Prince William. Fauquier remains distinctive and unique.
It is those who have bought a house during the last few years that are facing the most problems. There is no equity on their property when for one reason of another they have to dispose of it.
The real problem is that it is not only the foreclosed houses that are affected but also a drop in their equity means a deescalating in the price of neighboring estates. During 2004, 2005 and 2006, countless loans were made with tempting rates.
Now many were these were coming up with reset rates, which the income of the borrowers do not permit. The rates have jumped even 50% higher than the original. The trend points to a further decline in housing prices. This has begun to tell on the stock market and also on automobile industries in an inevitable negative chain reaction.