Is My Loan OK?

Aug 5th, 2007 @ 9:19 AM by MortgageMentor

If you’ve seen Jim Cramer on CNBC, or read the financial section of your local newspaper this weekend you’ve heard about the tectonic changes occurring in lending. The big news of the week was the revelation that American Home Mortgage was closing its doors; leaving approximately $750 million worth of loans in a lurch. These loans did not fund, and after this week’s round of credit tightening it is a dubious wager to bet they’ll fund at all.

If you are a homeowner who was lucky enough to avoid the AHM mess, but still has a loan in process here are a few steps that you can take right now to ensure that you’ll have your money at the closing table:

1. Call your mortgage provider now and ask for the following information: a copy of your rate lock, the name of the investor the loan is going to, and if it is being funded in house ask for a health update on the company.
2. Ask your mortgage professional if they are still honoring the rate locks issued on their products, confirm all items of the lock. Be sure to ask when the lock expires as the lender may be unwilling to issue an extension.
3. Research your mortgage provider and the investor of your loan online. A quick Google search can reveal whether the company you are working with is in trouble financially.
4. Ask your mortgage professional if you should consider a back up loan offer. This could be especially prudent if you are buying a home.
5. If you are just starting the process work quickly to secure your loan. As things remain in flux the best position to be in is being done with your loan. While you should work to get the best loan possible understand that time is of the essence.

One last tip – if things change in regards to the rates and programs available to you during this process try not to take your frustration out on your loan originator. The market is facing historic changes and your originator has little influence over these massive changes – they merely have a front-row seat.