There has been much talk of the Sub-Prime mortgage industry having troubles. Yes, there is trouble now

and more to come in the near future. In light of this, FannieMae and FreddieMac have begun pulling back on the loan types they will purchase. These two

(publicly traded companies) will rock the mortgage world this year. Each product they will not purchase is a product the banks will discontinue offering the

consumer.

I received a notice today from one of my larger A paper providers.

It reads as follows:

Loan Product Changes:

These changes are in effect for certain segments generally defined by high combined loan-to-value,

lower credit scores and low documentation loans. In no way does this indicate a wavering of our commitment to this segment of the market. We are

committed to taking a proactive and responsible approach as the industry works through these tough conditions.

Changes to our Alt-A and Gold guidelines include:

Up to 95% LTV/CLTV allowed on N/O/O.

Stated Inocme-Stated Asset no longer accepted Credit scores <660 full doc only.

No doc loan types will change to No Income-No Asset doc type with an increased credit score

requirement of 700.

There will be many more changes and set backs for lenders and consumers alike. The consumers

that truly qualify and need these products will no longer have them available. There may not be alternatives, which will mean less people will buy homes this

year. How will this affect the house market and prices?

-Dale Siegel