Alternative Mortgage Programs – Subprime Lending

Subprime LendingAccording to several media outlets, Wells Fargo is offering subprime lending again.  In addition to Wells Fargo, smaller non-bank companies, including Citadel Servicing Corporation, have started to increase their subprime lending.   Wells Fargo is the largest mortgage lender in the United States.  Subprime lending is designed to help those applicants that have a difficult time obtaining other mortgages due to, among other reasons, low credit scores, divorce, and medical emergencies.

Although subprime lending had a bad reputation in the past, companies are becoming more strict regarding their lending criteria.  Some companies are now referring to subprime as “another chance mortgages” or “alternative mortgage programs.” Currently, borrowers often are required to make down payments and supply comprehensive information regarding income, work history, and bill payments.  Thus it would seem that income qualification is still important in the mortgage process.

As the real estate industry begins to show steady recovery, Wells Fargo believes that they are now able to open their doors to those of higher credit risks.  This change in lending could boost the housing market demand.  Borrowers who have had to wait out the recovery will now be able to obtain loans to purchase homes.   In 2013, less than 1% of new home loans were with subprime borrowers, while 10 years ago, subprime borrowers averaged one quarter of loans originated.

If you are interested in subprime lending, call ReCasa Financial Group today at 614.221.6770.  We can help you obtain the loan that is perfect for you.