Mortgage Anxiety Affects Everyone from Lenders to Buyers in Nashville

As a previous loan coordinator for a large, mortgage company (that shall remain nameless, though I will say that they owned a baseball stadium in Arlington until March 2007), I know first hand how fickle the market can be, as an employee and as a homeowner. That prospering company has since closed all 200+ retail branches and issued layoffs for almost 4,000 employees, including both Nashville branches.

Although my layoff was one of the first in November 2005 (a curse of being the newest hired and part of the "purchase team"), it seemed the end was near for everyone involved. By May 2007, everyone had been let go and a leading mortgage company struggled to stay afloat in a fickle market.

Mortgage anxiety is not just affecting Nashville residents who already own a home, but also those who would like to purchase a home. A local title company in Madison, TN has reported that Countrywide Financial loans are not being funded. They are not accepting any new loans right now. Why? Simply put, it is because the money is not there. They are not the only lenders who have run out of money. In 2007 alone, American Home Mortgage, New Century Financial Corporation, and SouthStar Funding are just a few of the lenders who were forced to close their doors and/or file for bankruptcy.

Nashville Residents Face the Anxiety

But, who feels bad for the mortgage company? No one feels bad for them except for the thousands of employees who have lost their jobs at lending institutions. What about the average person who cannot get, or afford to keep, a home loan?

The mortgage and home loan world is not the only ones to feel the economic squeeze. People everywhere are facing layoffs from positions they felt were secure. Now, they are faced with having lost their source of income, as well as possibly foreclosing on their home.

In my home alone, only months after purchasing a modest, new home near Smyrna, TN, both sources of income were eliminated due to layoffs. It is not always easy to bounce back and mortgage companies do not prosper by being generous. Unfortunately, not everyone is able to bounce back.

A Shrinking Market for Home Loans

Some Nashville-area residents are still able to get a loan, but they have to have a clean credit history and be ready to finance their home with a standard loan. Creative options, such as 100% loans (also known as 80/20 loans), second mortgages, home equity loans, and stated or limited income loans are much more difficult, if not impossible, to qualify for in Nashville.

Typically, the home loan market has its ups and downs with interest rates and financing options. However, statistics show that this is not just part of the trend. The Dow Jones is dropping. The sale of existing homes is falling; and foreclosures are on the rise.

The good news: people are still buying and selling homes. New homes are still being built; and Nashville's new uptown, "sky villas" will be filled. Nashville's economy, though facing a tough time, is trying to stay strong. More time is needed to see if the market has crashed or merely faced a small bump in the road.