Financing Is Too Tight

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Real Estate Agent with RE/MAX Results 20344949

 I was pondering how hard it is for many people to get a loan right now I came to this conclusion: HOME FINANCING IS TOO TIGHT!

I understand it was way too lose in the past, but it is so tight right now the banks that are trying to cut there loses by tightening will be losing it on the back in with the homes that they (REO LISTINGS) own that are sitting vacant because very few people can get financing for them.  Plus, as they stay tight with their lending the supply of homes will stay high would further cause prices to come down. 

So what do you suggest?  What needs to happen?  I want to hear others opinions and ideas!  Thanks!

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Chuck Carstensen is a Realtor with The Discovery Team at RE/MAX; helping buyers, sellers, and investors of residential real estate in Isanti, Anoka, Sherburne and Wright County.  He is a speaker and co-author in the best selling book series Wake Up...Live the Life You Love: Your Wake Up Moments (available soon). Carstensen is also a personal development mentor with Success University...where he helps people discover how to be more successful in business, life and health.

 

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Chuck Carstensen is a Realtor with RE/MAX Results in Elk River and Cambridge, MN.  Helping buyers, sellers and investors in great Minnesota counties like Sherburne, Isanti, Wright, Anoka, Chisago, Hennipen and Mille Lacs. He is a Certified Distressed Property Expert (CDPE).

Contact Chuck by emailing him at chuck.carstensen@results.net or by phone at 612-290-3809. 

 

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Rainmaker
391,713
Kim Sellers
Lake Arrowhead, CA Coldwell Banker - Lake Arrowhead, CA
Lake Arrowhead Realtor - BRE#01412099 - Lake Arrow
I don't see a tightening per say.  I see a more solid base on financing, when you send a client in to the lender, it is a solid deal from the start.  The consumer now isn't almost qualifing, the are qualified.  That makes a big difference.  I am glad to not be dealing with the fly by night lenders who really were sketchy on what they could get done.
Apr 30, 2008 08:57 AM #1
Rainer
45,132
Scott Geary
Infinity Home Mortgage Company Inc - Allentown, PA
Your Pennsylvania Mortgage Source
As long as I have been in this biz - the solution to problematic times has been to lend your way out. Volume will cure alot of ills. That being said, some of the stiffening of guidlines and product availabilty seems to be a knee jerk reaction to a national (generally speaking) foreclosure epidemic caused by guidlines and products which seemed to be penned by Crazy Eddie! There is a middle of the road somewhere. The lender / buying pool that finds it first will find a windfall like no other. Until then....we wait.
Apr 30, 2008 09:12 AM #2
Rainmaker
309,418
Don Polletta
MBC Interactive - Waterbury, CT

Chuck - Nothing needs to happen it will all take care of itself. They call it the cycle. A period of loose credit guidelines followed by a period of tightening which at some point in the future will be followed by a period of loosening. You must remember the late 90's Dan Marino First Plus mortgage 125% LTV end of a loosening  period. All we can do is adapt, and realize if you survive this one you will be well trained to cash in on the next loosening cycle.

Apr 30, 2008 09:19 AM #3
Rainer
42,692
The Entire Team of Price & Company Professionals
Price & Company Realty - Myrtle Beach, SC
I'm with you Chuck.  I have quite a few clients that are looking at the end of a loan term coming due, and now the bank has cut their programs so dramatically that NO ONE can refinance.  They're going to have a whole inventory of property just sitting there losing them money when they could do the LOGICAL thing and simply extend the terms of the current loan!  (If you, or anyone else here in the AR community know someone in the upper echelons of Wachovia, please let me know!!)
Apr 30, 2008 09:23 AM #4
Rainmaker
600,960
Lindsey Hasford
Edina Realty - Elk River, MN
Bringing you home...
Chuck - It does seem really hard to get financing right now. Almost to a fault... every time someone gets qualified the program changes and the next person can't get in under the same guidelines. It is a cycle... happens in every area in life I think. It will be interesting to see what the next few years bring for our economy.
Apr 30, 2008 03:42 PM #5
Rainmaker
1,137,743
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota Real Estate Expert
I think that some people that are losing there houses would like to stay there and more bank should work something out with them.  Plus there are good people that want to get in a home but they make it so difficult.  The market would get better in a hurry if they had a little more flexibility.
May 01, 2008 02:06 AM #6
Ambassador
516,674
Pam Dent
Gayle Harvey Real Estate, Inc. - Charlottesville, VA
REALTOR® - Charlottesville Virginia Homes / Horse
Hi Chuck.  While it is good that we are getting back to where people have to actually qualify to get a loan, there does have to be a happy medium.  It is very important to deal with a stable lending institution.  I've heard of too many instances where it got to the day before closing and the loan product was no longer available.
May 01, 2008 04:05 AM #7
Rainer
6,398
Andrew Magliochetti CCIM
Helios Realty and Development - Chicago, IL

We had a national lender arbitrarily reduce an appraisal this week.  What gives with that?

May 01, 2008 04:20 AM #8
Rainmaker
162,875
Rhonda Burgess
Southern Living Realty Partners - Smyrna, TN
Moving to Nashville TN Real Estate Specialist
Just as the underwriting guidelines made no sense for years, as in it was too easy for nearly everyone to get a mortgage, the pendulum has now swung to the opposite side.  I've been keeping a running list since October that on average I see only 1 out of 4 buyers being approved for a mortgage.  This is happening because of the much tighter underwriting criteria, the loss of many lenders from the marketplace in general, and various loan programs being discontinued from day-to-day.  It's making a huge difference.  I don't like the lack of control - I can market a house to the fullest and find the perfect buyer and in turn create happy sellers but if at the end of the day the buyer cannot get a mortgage, all of my work is lost and nobody is happy while we watch the DOM climb and the market continues to decline. 
May 01, 2008 05:19 AM #9
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Rainmaker
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Chuck Carstensen

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