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Senior Advisor

Home loans

My daughter and her future husband just closed on a home purchase friday. Normally the firm has several closings going on the same day with several offices engaged and people waiting for their turn. Not so friday as they were the only couple closing on that day.


Evidently there are buyers for homes but the lack of willing lenders. I wonder what is causing that. Banks unwilling to hold mortgages til term or the lack of buyers for the packaged bundles of mortgages. In any case there seems to be a need not filled as even highly qualified fols arebeing rejected.

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2 Replies
Frequent Contributor

Re: Home loans

Lending practices have surely changed, but so have the procedures for getting the funds to the closing office. In our area, it has become common for the ultimate source of funds to delay transmittal of funds to the closing office until all the paperwork has been signed and notarized--in effect, causing 2-part closings (one for signatures, second for dispersal of funds). Depending on the source of funds, wire transfer of funds can take 20 minutes to 6 or 8 hours; this uncertainty has moved closings away from the traditional last Friday of the month to earlier in the week or month. I'm not sure if the raising of acceptable credit scores for getting a loan falls into your category of lack of willing lenders, but it's surely related.

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Honored Advisor

Re: Home loans

Verification is causing a lot of holdups, I imagine.  The real problem with the mortgage meltdown was that so many people simply could not afford the houses they had bought, and not nearly enough lenders were making wholehearted attempts to verify income.  Now that they have to do what they ought to have done all along, not as many are meeting the qualifications. 

I think, too, that way more people than you'd suspect are way more in debt to credit cards and too many new cars, for example, to have enough credit left over for a house.  Others are up to their necks in student loan debt, and a lot of them are in deferment.  Someone can look pretty  good from a distance - educated, employed, etc. - but may not be as great a prospect for repayment potential, when you see the whole picture. 

When a  kid starts adult life with tens of thousands of dollars in loans dragging them down, it is hard to find a way - especially in this economy - to carry that weight off and earn enough to do much else but eat beans.  Also, I have wondered if maybe banks may not want to lock in loans at record low rates today, that they will have to live with for 30 years, too. 

Congratulations to your children, for their obvious responsibility, and on achieving the American Dream.

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