More Can Afford a Home, But Lenders Remain Tight-Fisted

More can afford a home, but lenders remain tight-fisted
Nearly half of all California households can now afford the median-priced home in the state –
but that’s no help if they can’t get mortgages.
Making sense of the story

 Six years after the subprime mortgage meltdown, banks remain tight-fisted, even with
solid borrowers – a fact they attribute to shifts in government regulation and demands
that they buy back bad loans.
 Mortgage credit has not eased much since 2007, according to Federal Reserve surveys
of loan officers, even while low rates and the housing recovery have borrowers lined up
seeking financing.
 First-time buyers and self-employed borrowers must jump through especially complex
hoops. Even gold-plated applicants must justify the smallest quirks in their finances in
excruciating detail. And, processing applications can take months.
 Lenders say their cautions stems in part from uncertainty over a tougher new regulatory
environment, along with unrelenting demands from government-sponsored mortgage
buyers that the banks repurchase soured loans.
 Salaried professionals with credit scores in the high 700s have the best shot at being
approved for a mortgage loan in this environment, along with borrowers who have never
missed a payment and want to refinance.
 However, even these borrowers may face stiff documentation demands, including having
to explain any bank deposit other than a regular paycheck.

The information contained in this article is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.

 

DRE License Numbers 01124318 & 01174047

 

Drew & Christine Morgan, REALTORS | Notary Public

 

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