Option One just sent out an email to wholesale partners that outlined changes that they’ve made in response to today’s market action. I assume that I’ll be getting these through the weekend, so I’ll try to do summary posts instead of one for each bank - otherwise I’ll have a lot of cut-and-pasting to do. Here is one important change Option One is making; is this the canary in the coal mine for condo credit?
Florida Condos: Option One will not accept submissions secured by condos in Florida
We already know that the condo market in Florida is decimated. We know that there are condo ghost-towns in new Florida towers. We know people are upside-down in their condos. We know that Alt-A is squeezed out of the market. We know that subprime is getting scarce. Are condos in for another round behind the woodshed? Are areas like Las Vegas, Phoenix, and San Diego (and other big condo markets) in for another dive? If condos are the favorite muse of investors, and investors are letting upside-down properties go; where are condo prices going to settle out in all of this? And how much will that uncertainty affect credit availability for condominium properties? If condos are cheaper to buy than homes and now credit is not being extended to them at all; what will people buy?
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[Source: Blown Mortgage]
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