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Loans The market above 1m had become restrictive in the last few months moving to a fully documented income, 720 minimum FICO playing field for most loan scenarios. Lending to the wealthy seemed stable. Then this weeks major crack in the 2m+ market which we specialize in, we knew another shoe had dropped in the credit meltdown. Granted 1-20m property finance is a niche within the 10 trillion dollar mortgage industry. But, the changes forecast major declines in luxury markets as this further decreases the available pool of buyers and will pressure prices. Program loan to value limits were cut between 5-10% at most investors. We received dozens of calls from brokers, realtors, and loan officers across the country desperatly searching for 20-25% down financing for their purchases that now require 30-35% down or millions in reserves which most clients don't have. Programs are available to put 20% down on property up to 6m but they require 1-3m plus in liquid assets beyond the down payment. It will take a few weeks for this meltdown to be seen in asking prices as housing markets move VERY slowly. Not like your gas station that changes prices every afternoon right before you pull up to fill the tank on the weekend.
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