It would appear mortgage companies are over-correcting from the previous practices that caused the mortgage meltdown. Read this excerpt from the Florida Association Of Realtors daily newsletter.
"Reeling from an estimated $300 billion in losses from bad mortgages, lenders last year began making it tougher for would-be buyers to get financing. They boosted the credit scores needed to qualify and eliminated loans to borrowers with less than perfect payment histories. They asked for bigger down payments and solid proof of income and assets."
This is to be expected because typically the market is slow to react. However, the problem is that the people who are getting hurt by these practices are potential first time home buyers. I am talking about people who should have no problem qualifying for these traditional loans. This is compounded by the expiration of down payment assistance programs in the near future.
As a buyer's agent who works with a lot of first time home buyers, I can speak directly about the frustrations caused by these practices. For example, I had a buyer with a 580+ credit score and 10% down who could not qualify for a sub $250,000 loan. This buyer would have easily qualified before this over-correction. The lenders have lost sight of the fact that they are in business to put people into homes, rather than making restrictions so tough that it's near impossible for them to get a home loan.
Read
"Reeling from an estimated $300 billion in losses from bad mortgages, lenders last year began making it tougher for would-be buyers to get financing. They boosted the credit scores needed to qualify and eliminated loans to borrowers with less than perfect payment histories. They asked for bigger down payments and solid proof of income and assets."
This is to be expected because typically the market is slow to react. However, the problem is that the people who are getting hurt by these practices are potential first time home buyers. I am talking about people who should have no problem qualifying for these traditional loans. This is compounded by the expiration of down payment assistance programs in the near future.
As a buyer's agent who works with a lot of first time home buyers, I can speak directly about the frustrations caused by these practices. For example, I had a buyer with a 580+ credit score and 10% down who could not qualify for a sub $250,000 loan. This buyer would have easily qualified before this over-correction. The lenders have lost sight of the fact that they are in business to put people into homes, rather than making restrictions so tough that it's near impossible for them to get a home loan.
Read
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