The credit crunch is putting the squeeze on small mortgage banks and brokers. Small lenders are being wiped out. Many small mortgage banks that specialize in loans that are out o ffavor with investors are desperate. This type of credit crunch has already caused a large rise in defaults, foreclosures that many had previously thought about. Borrowers are finding it very difficult to refinance to avoid rising payments on adjustable-rate mortages. They can not line up new loans either. Brokers are suffering just like the rest of the other interested parties. Lenders have to change their guidelines to stay in business.
Lenders, brokers and mortgage banks are going out of business in trove. The shakeout hits CountryWide Financial and many other companies.
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