Every time we turn on the news the buzz word of the quarter has been "subprime". This small segment(15%) of the mortgage industry has garnered the attention of the media. The truth is; yes defaults are hurting some banks liquidity.

Guidelines are changing and the subprime market is temporarily wounded.This does not mean if you are in chapter 13 or pre-foreclosure that you can not refinance your home, if you have equity.The people who are really in trouble are those with poor credit and a high LTV(loan to value).

The 100% stated income/stated asset purchases/refi days are gone.Chapter 13 debtors are unaffected by the changes in the market notwithstanding. Quality chapter 13/foreclosure loans are still being funded(even with late payments).The loans may take longer in underwriting, but they will continue to fund chapter 13/foreclosure loans due to the high defaults around the country.

The big headlines are about Irvine CA based New Century and Fremont's demise.The demise of New Century and Fremont does not affect those that are trying to buyout a chapter 13 or a foreclosure.If you filed a chapter 13 you made very smart move, you still OWN a home. The demographic that's hurt the most is first time/subprime homebuyers. If you dont have a 620 FICO or higher don't expect to be buying a home without a considerable down payment. Many debtors have made the decision to sell their home. Selling your home should be a worst case scenario. Many mortgage brokers put the idea in a borrowers head that "If I cant get you approved, you won't be approved anywhere". That kind of thinking is not only negative, but outright erronous.

If you need a a bypass heart operation would you see one or two cardiologist's and call it quits? You worked hard to become a homeowner, chances are you are not dealing with a chapter 13/foreclosure loan specialist. You wouldn't go to a ENT(ear nose and throat) If you were having chest pains. You need to deal with a loan officer that works only in chapter 13/foreclosure loans.The foreclosure guidelines are still 75%LTV Fully documented. Don't list your home if you think you may refinance. If you listed your property within a 6 month time frame, you will not be able to refinance the property.