Mortgage lenders for bad credit

Since the great Recession of 2008 the lending climate has changed adversely towards the borrowers. The rules and regulations post 2008 have increased thereby making lending difficult and much to the chagrin of borrowers who now have lot more hoops to fly to land a mortgage. The Frank Dodd bill when fully implemented, will bring lot more of the same.

Most of the mortgage lenders for bad credit who existed prior to 2008 have been wiped off, and the mortgage field is now less dominated by individual brokers but with lots of corporate entities who has withered the storm surge since 2006

The borrowers have suffered for two main reasons:

1. Increasing regulations have diminished mortgage products and there is lot less loans available than in the heyday of 2006. Than there are fewer mortgage lenders for bad credit who can deliver these products to the borrowers and fewer lending channels which are now dominated by big corporate brokers. Many smaller companies have not been able to qualify with the national identification plan and pass exams to be eligible as such to date
2. Despite the the tax payer bailouts and revamping of mortgage banks since 2008, lenders have held back and have not been lending with full speed. They have held back lending to the detriment of borrowers. Some lenders have suffered down grades in their existing portfolios, and are now gun shy of lending than earlier.

Borrowers on the other hand have suffered economic hardships and extenuating circumstances, and are loaded with debt and unpaid obligations. The credit profiles have been damaged beyond recognition in some cases and the fallout has created a borrower profile that cannot meet the strict criteria set by lending institutions.

Therefore, bad credit mortgage refinances have become the norm rather than exception and with fewer products available, FHA lending has become the leading program for credit challenged borrowers. The program basically insures a mortgage lender for bad credit to a certain amount and lifts the risk off the back of the lending institution. Its however a win win for all parties.

The purchase loans and the real estate markets have suffered as well, because the lenders have largely kept themselves at the ring side and watched the game. The buyers and sellers may agree to purchase a property but the lender wont agree on the deal and bank will not release funds to many transactions unless the values are lowered or cut. This is a nightmare that shows up in many real estate offices everyday.

Bad credit mortgage refinances are also harder to accomplish because there is a lack of equity in the properties and as the values have fallen from the 2006 peak levels.

The US economy appears to be on the mend, with employment gains, slowly adding payrolls and manufacturing activity on the rise. The GDP is also coming in at 2 to 3 percent clip every quarter which makes things better but there is no sustainable recovery in the housing area.

Unless there is a significant turnaround in the economy the lending climate, wont change much in the next few years and may stay stagnant way past 2012 election year.

Even if the US economy turns around and comes back, and somehow the mortgage lenders for bad credit start lending at greater pace, the the good old days of 2006 will never come back. There is now a completely changed landscape after the  Great Recession of 2008  and the what followed afterward.