I just lost a deal today that by all means would have been a sure thing 3 months ago. I met this buyer through the internet...looking for homes online as over 80% of buyers are doing now and introduced him to our in-office mortgage people who was able to set up a face to face meeting to do a loan application and allow me to meet and get to know him too. He was so excited to be buying a home; asking for any all prospective properties to be sent to him and he was eager to begin the process. It was heartbreaking to see someone, a first time home buyer, be told that his fairly good credit was not good enough to buy a home.
After being forced to do away with seller down payment assist loans which, by the way is a good product when it's done right, I heard about a great alternative product: USDA garaunteed loans. They are not the lender, although they can be if the buyer qualifies, but they are backing the loan. A loan which can be 105% LTV...there's a catch though, it has to be in a rural area...you can check out the address eligibility on their website: www.eligibility.sc.egov.usda.gov.com and the income has a maximum...also can be checked on that website. Qualifying is much the same as FHA but has some more flexibility on credit. He met the income - debt ratios with no problem but had just a few hits on a couple of accounts...something that would have passed in manual underwriting without any problem...we're talking minor credit issues here. But, we got a no. It surprised us all; I don't know why with all we're hearing on the news. This is a definite example of how the markets reaction is just shooting themselves in the foot.
I hope this helps other agents; it's a great option for agents with access to rural areas. But for me, well, not today. Thank you Wallstreet, Bankers, Fannie Mae, Freddie Mac, and a whole slew of don't fix it till it's broke money motivated people...WE now are all going to pay the price when most of you probably have a nest egg so large now that you don't even HAVE to work anymore.
Salt on an already painful wound is what I call it. Sure hope there's a DOCTOR in the HOUSE!!!