Ty Mann of Visionary Lending Corporation has been our lender of choice for several years.  Just so you know it isn't happening only to you, here is his story of having his HELOC frozen by his lender.

There is more bad news in the mortgage industry, this time it is from the Mortgage Insurance Companies.  The Mortgage Insurance Companies have come out with their own zip code list that they consider to be a declining area.  Unfortunately, for the most part it is all of the Denver Metro Area.  Even if a property address is accepted by Fannie Mae or Freddie Mac, the mortgage insurance companies will not insure it, unless 5% is put down.  Since every Fannie Mae or Freddie Mac loan at 100% financing has mortgage insurance, regardless of whether it is Lender Paid or Borrower Paid, this option is eliminated. The 80/20 is basically a thing of the past for now, because 2^nd mortgage companies are only doing an 80/15, especially with 1^st time home buyers.

 

What options are left?

 

There is still alternative financing out there, but the rates are high and there will more than likely be a soft pre-pay penalty.  The best option left is probably going to be FHA.  Nehemiah Down payment assistance is still available, although a judge is ruling today on whether to continue to allow it or not.  If it is still allowed though, we have to get the seller to donate 6% for closing costs and down payment which is getting more challenging.  Secondly there is the CHAC or CHFA down payment assistance through Colorado, but that has income restrictions for borrowers.

 

FYI-  For any of you that have a HELOC on your house and use it, be careful because investors are freezing them so you can’t draw money against it.  It happened to me, because they consider my area declining.  I had to get an appraisal to support that the value is still good to access my funds again.  The appraisal supports it has appreciated a good amount since we bought it.  I say this to prove no area is immune to this issue.