Are Easier Financing Requirements Ahead?

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Mortgage and Lending with NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 IL Lic 031.0006220/WI
 Are Easier Financing Requirements Ahead?   



https://1609956119.secure-loancenter.com/FreeConsult.aspx      Recently (and I'd say somewhat unceremoniously given the importance and need for the announcement), Fannie Mae and Freddie Mac announced the easing of Financing Guidelines ... including the news that they're bringing back the 3% Down Payment - Conventional Mortgage. 

          Good news, no doubt about it.  But even more changes are needed ...

     Mortgage Lenders and Agents (and the public) are still anxiously awaiting the much-needed relief demanded to relax the tougher standards that came as a result of the housing recession/crisis that arrived in the mid-2000's.  A crisis from which we are still healing.  

     Perhaps slow, stagnant sales numbers and housing-sales statistics have finally caught the attention of the "powers-to-be" and that's why we're finally seeing Fannie and Freddie take action?  Facts prove the housing market has not come back to good or robust health.  

     While it's true some areas of the country are doing better,  collectively things are still not as they COULD or SHOULD be.  Although better, Mortgage Lenders are still somewhat reluctant to freely lend money.  There's a reluctance by potential Sellers to list their homes, or lower prices if they did.  Buyers are slow to seek financing or to actively view homes to buy.

     As a result, there are fewer Real Estate Transactions being conducted in the current market.  And while less demand typically means stable prices ... it generally means an over-supply of properties too.  

     What would remedy the imbalance we're currently seeing?

     A loosening of financing approval standards would definitely help.  It would allow:

  • Deserving Home Buyers to buy
  • Home Sellers the ability to move on .. move up  
  • Baby Boomer Home Sellers the ability to achieve a retirement goal 
  • Mortgage Lenders would have the ability to lend more easily without constant worry about nitpicking details.  They would be capable of focusing on the larger picture and things that truly matter and facilitate Closings


     Bottomline:  It's time to see the pendulum swing back ... and in the favor of the voice of reason.  That certainly doesn't mean a return to the loose lending standards found prior to the housing downturn.  

https://1609956119.secure-loancenter.com/FreeConsult.aspx     A voice of reason, commonsense mortgage lending would be lending as Goldilocks considered ...  "just right".  Right now no one seems to know what "just right" is or should be.

     One thing is obvious to me.  Home Buyers and current Home Owners need to know what the benefits of homeownership are.  They have to want to be Home Owners.  And they certainly need to face fewer fears or stresses during their Mortgage Process.

     That won't happen as long as Mortgage Lenders themselves remain under the tremendous number of regulations and pressures they currently deal with.  If Lenders remain under the stringent and highly-stressful regulations the government and regulatory entities now place on them, clients and others within the industry will continue to feel them too.

     The recent announcement recently made by Fannie Mae and Freddie Mac is a hopeful start ...  


     *  Hoping to Buy, Build, or Refinance a Home in the Chicagoland area?   Contact Me Today!   I'll put my 37 years of Mortgage experience and expertise hard to work on your (or your clients') behalf.
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Gene Mundt

 Mortgage Originator  -  NMLS #216987    

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Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Lenn Harley .. in this instance, and so many others, I wonder how many of those writing the rules/regulations have real experience at transacting loans.  And how long ago they performed those loans?  In today's lending world, you need timely and "boots on the ground" experience to understand the ins-and-outs of the process ... the stresses and demands ... and the thought process behind it. 

Brian:  I've been in this long enough to tell you your assessment is correct!  From one extreme to another, with little time in the middle-of-the-road, common sense area ...

Gene

Dec 03, 2014 11:44 PM #31
Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Scott Godzyk ... What is a "reasonable" request within one file, is unreasonable in another.  That's where the common-sense needs to come in.  But Underwriters get spooked regarding the level of accountability they will be held to currently.  I really think that is where much of the process goes off-track ... and why ...

I understand your frustrations, Nicole.  Believe me.  What I see typically happen in these types of transactions is problems developing in the documentation of accounts .. and possibly within Tax Returns.  Underwriters might question why someone with so many means and dollars would buy a home in that price range?  They'd want to make sure that it was actually going to be used as represented, i.e. their residence ... or investment??  Once those questions are answered, the loan should proceed fairly smoothly and quickly.  But without knowing the full details of the loan, it's hard to guess about what held it up as it was any further ..

Gene

 

 

Dec 03, 2014 11:51 PM #32
Ambassador
1,207,209
Amanda Christiansen
Christiansen Group Realty (260)704-0843 - Fort Wayne, IN
Christiansen Group Realty

I wish there was a "love" button here, Gene.  Fantastic news, and great information as always.  

Dec 04, 2014 12:34 AM #33
Ambassador
4,300,186
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com as much as it is a good news, hope things don't go out of hand, once again!

Dec 04, 2014 12:36 AM #34
Rainmaker
790,860
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

I'm hoping some of these lending requirements get a little looser in the next few years.  My son who works for me was buying a house this summer and there was a new problem every day with trying to get the loan.  Ridiculous.  

Dec 04, 2014 03:03 AM #35
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com this is good news and I agree, it's a hopeful start. It's predicted Millennials will start buying next year in 2015, and a 3% down payment on conventional loans might make all the difference. 

Dec 04, 2014 04:15 AM #36
Rainmaker
620,990
MaryKay Shumway
The Kellstrom Ray Agency, Inc. (Est. 1948) - Sister Bay, WI
Door County Wisconsin's Real Estate Expert

Gene, thanks for this update and for the great news for my customers and clients.

Dec 04, 2014 04:36 AM #37
Rainmaker
876,608
Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

I have been baffled by some loans lately that are approved while others that would seem more logical are not. 

Dec 04, 2014 05:48 AM #38
Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

Very good post Gene!  As they say "All things in moderation."  Loans and underwriter approvals are no different.  Although, I do like the requirements being a little more than just breathing on loan docs to get approved!  

Dec 04, 2014 06:25 AM #39
Rainmaker
1,792,871
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

well thought out post to keep us up to date Gene Mundt, Chicago-area Mortgage Lender - www.genemundt.com with the craziness and possibilities to come in mortgage land...like Peter Pan land??

Dec 04, 2014 09:32 AM #40
Rainmaker
1,523,605
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

Hi Gene, it is welcome news to REALTORS that qualifying for a mortgage will be easier than it has been for a while.

Dec 04, 2014 09:36 AM #41
Rainmaker
601,540
Claude Labbe
Real Living | At Home - Washington, DC
Realty for Your Busy Life

You are right to say it's going in the right direction, though I sure would appreciate a quicker movement.

Dec 04, 2014 10:05 AM #42
Rainmaker
1,317,551
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Thanks for the update.  I have been hearing this may occur.  I hope it has a positive effect.

Dec 04, 2014 11:57 AM #43
Rainer
333,502
Frank Castaldini
Compass - San Francisco, CA
Realtor - Homes for Sale in San Francisco

Juat heard from my leading lender that there is a new loan out for I believe property up to $1.6M requuring only 10% down and no PMI.  That could be appealing to some. 

Dec 04, 2014 01:30 PM #44
Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

We all need positive news, no doubt about it.  Hoping that 2015 truly is better, both for buyers/sellers .. and our industry too, Jared ...

Praful Thakkar ... hopefully there are enough rules/regulations in place to prevent that from happening.  Some changes were needed ...

Gene

Dec 07, 2014 11:08 AM #45
Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Kevin Mackessy ... I always say it's hard to give an opinion on any closing transaction without having all the info and details available.  I do hope that you provided a strong recommendation for a good lender!

Pamela Seley, REALTOR® ... I too have seen a few different articles giving that news/opinion.  Hopefully they prove to be true ...

Gene

Dec 07, 2014 11:11 AM #46
Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

MaryKay Shumway, ABR, CRS ... it's important to know trends and predictions for business.  That way we can be alert ... and better prepared on our clients' behalf ...

Janis Borgueta ... I have found that until you have all the financial background in detail, it's hard to determine the outcome of a loan.  Things are not always as they may appear ...

Gene

Dec 07, 2014 11:16 AM #47
Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

We know how that played out, Carla Muss-Jacobs, Principal Broker/Owner ... and we definitely need to avoid that outcome again ...

Ginny Gorman ... in our business, things can change quickly.  We've certainly learned that, haven't we? Sometimes that's good ... other times ... not so much.

Gene

Dec 07, 2014 11:22 AM #48
Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

For Lenders too, Sybil Campbell .. for lenders too!

Claude Labbe ... progress can be infuriatingly slow.  But I'm thinking this is timely heading into a new year ...

Gene

Dec 07, 2014 11:24 AM #49
Rainmaker
1,229,941
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Joan Whitebook ... you're right.  Rumblings of this have been heard for awhile now.  We have to learn patience in our business, don't we??

Frank Castaldini ...  I, in fact, just wrote a post regarding this Jumbo financing a few days ago.  (Here's the post:  "More Good News for High-end Well-Qualified Buyers" ).  And you're absolutely right.  There are features of this loan program that interest many Jumbo-qualified clients.  Good Luck .. and if you have questions, feel free to ask me ...

Gene

Dec 07, 2014 11:32 AM #50
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Rainmaker
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Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi

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