[Greg]

In case you haven’t noticed, sub-prime brokered loans are getting tougher to do in more ways than one. Lenders are tightening up their requirements and many are raising rates, making it harder to qualify. Here’s some recent examples of a few across-the-board rate increases by major sub-prime lenders we currently broker to:



First Franklin + 12.5bps 1/4/06

Fremont + 20bps 1/2/06

WMC + 10bps 1/3/06

Option One + 15bps 1/3/06



Along with the above rate increases, I am also seeing some lenders raise their minimum score requirement on full doc 100% CLTV from 580 to 600. This is a growing trend in the sub-prime industry and you should expect to see more of this type of credit requirement tightening in the coming months. Those that have not raised the minimum FICO have drastically increased their rates on the 100% CLTV Combos. First Franklin first instance, just added a rate increase of 62.5bps to the 1st mortgage on an 80/20 if the CLTV > 90% and < 600 score.



As if that weren’t enough, you should also be aware that the new law raising the minimum required payments on credit card debt is in effect and this will make debt ratios higher. You’ll soon see the new payments showing up on credit reports if you haven’t already. So pay careful attention because borrowers may list the lower former monthly payment on their 1003 and the credit report may reflect the higher new payment, and if that changes the DTI dramatically, the lender many deny your loan.