Do you have clients that come with a pre-approval in hand, and just need to find the perfect house? I'm finding that many banks today are changing the terms of the mortgage once the property is found. These are not "fly by night" lenders, but large banks with proven track records. Buyer Beware! Agent Beware! If the dream home is in an identified declining market, banks may not fund the loan, unless the buyer comes up with more cash down.
Just like in the stock market and insurance industries, risk has a price or a premium. If you want to do business, you must pay more for added risk. I suggest you talk to your lenders and ask what their positions are. We all know the states that are suffering with increasing foreclosures and subsequent price declines. What we don't know is the areas within our own states that may be defined as "risk" areas. Mind you, the lenders will make the loans, or they may be accused of red-lining, but they will raise the interest rate or down payment requirement. This may knock your buyers out completely.
In our area of central Connecticut, many "on deposit" properties are taking a long time to close. I think buyers are scrambling to meet new terms specified by the lenders. What are your experiences with lending right now?
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