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While I was making calls this week for last night’s Alt-A story, I dropped a note to Jon Maddux, CEO of locally based You Walk Away, a company that promises to help borrowers get through foreclosure for a $1,195 fee.
I asked Maddux if he’s been hearing from more Alt-A borrowers than subprime these days. Of course, the fact that this company charges for its services — as opposed to foreclosure counseling operations that are run by nonprofits — would tilt the clientele toward the Alt-A category anyway.
Maddux passed along my question to his staff, and then shared with me their responses. I thought these comments, like the conversation I had with local mortgage broker Dave McDonald in the story, demonstrated some of what the region’s up against with these loans.
Each one of these is a different staff member:
- “I would say most of my clients are Alt-A if not better. Almost all my clients come to me with solid credit anyway.”
- “Definitely more alt a and A paper. My past few clients were pretty strong borrowers but they had to walk based on the economy or job relocation or simply as a business decision” One of my clients has 800+ credit score and has been trying to work with his lender for 6 months to get a modification. He is upset and now just walking due to the lack of response from his lender.”
- “I think the majority of the subprime crash seems to be coming to an end. Most people I speak with are either in a 5year IO (interest-only), 30 year fix, or a Neg Am. The 2/28, 2/27 etc. (adjustable-rate loans) are still coming in but they seem to be few and far between.”
- “Most of everyone I sign up is a well qualified customer with an A or Alt a loan. Most are concerned about job loss and / or massive loss of equity.” Very few are ARM loans that have adjusted.”
Again — these don’t represent any sort of across-the-board perspective for the county, but I think these anecdotes from mortgage pros are worth collecting along with the numbers as we try to make sense of what’s next in this market. If you have insights to share, leave a comment below (if you’re not in Survival, go there).