There’s a hurricane heading for the IE and Countrywide Financial has rated it a Cat-5! Countrywide has rated it’s market areas from Cat-1 to Cat-5 and the full report is posted here. Of course, Riverside/San Berdu is rated a Category 5. What does this mean? It means they expect the market in this area to be the most “challenging” as far as housing goes. Their lending standards ( I know, what standards…) are different for each area. The worse the rating the more difficult financing will be to acquire. Being a Cat-5 area they are requiring a lower loan to value percentage. 90% is the max they will go, so you either need 10% down or a high appraisal. I’ve also read in some realtor blogs that they also bumping up the paperwork, income and FICO requirements on these Cat-5 loans. Bottom line, it just got even harder to get a loan.
Soft Market Category 4-5 loans
Maximum financing will be reduced by 5%Example: Maximum financing per Countrywide's Loan Program Guide allows for 95% LTV. Loans in Category 4-5 will be limited to a new max LTV of 90%.
Soft Market Category 1-3 loans
Maximum financing will be reduced by 5%, only if the appraisal or appraisal review indicates any of the following:
* Declining Market
* Marketing time over 6 months