Today’s Real Estate News 10-10-2011

10 Oct

The very last article today seems to suggest that denials of new loan applications are up, however the author never comes out and says that.  I wonder, is it simply an alarmist piece trying to create bad news where there is none?  Are denials up, or down?  I’d love your feedback on my blog today! 

Today’s news that may be of interest to you:

No Recession for U.S. as Forecasts Improve
Bloomberg | October 10, 2011
The U.S. has likely dodged a recession for now, even though it’s too early to sound the all- clear for the economy.

Recession Officially Over, U.S. Incomes Kept Falling
The New York Times | October 10, 2011
In a grim sign of the enduring nature of the economic slump, a new report shows that despite some improvement in the economy, household incomes have lagged.

Recession Lingers for Many
The Wall Street Journal | October 7, 2011
More than a third of small-business owners say the country is still in a recession, and their plans for hiring and capital expenditures are mixed, a recent survey shows.

Fannie, Freddie Expand Allowable Foreclosure Assistance for Military
HousingWire | October 7, 2011
Fannie Mae and Freddie Mac will allow military members to claim a permanent change of station order as a hardship to be evaluated for foreclosure assistance.

Housing Industry Jobs Down for Fourth Month in September
HousingWire | October 8, 2011
The housing industry lost 5,700 jobs in September, marking its fourth consecutive month of employment shrinkage, preliminary figures from the Department of Labor show.

Homeownership Decline Outpaces All But Great Depression | October 7, 2011
The national homeownership rate fell by 1.1 percentage points between 2000 and 2010. The U.S. Census Bureau says it’s the steepest drop since the period from 1930 to 1940, when the rate plummeted by 4.2 percentage points.

From the National Association of Realtors®:

23 Housing Markets Show Big Improvement
Learn which markets have seen the biggest improvement in housing permits, employment, and housing prices over the last six months, according to the National Association of Home Builders’ new Improving Markets Index.

30% of Buyers Denied, Give Up Getting Mortgage
More stringent lending requirements are keeping more buyers on the sidelines. More than 2 million people were turned down for mortgages last year, according to federal data.  Source article is: Triggers for Rejection from The New York Times. 


Anthony Carollo 2007 EMAIL  

Join My List

Find me on:   LinkedIn     Facebook

Anthony V. Carollo / President
Stewart Title of Spokane
606 W. 3rd Ave.
Spokane, WA  99201
Telephone: 509.328.7171
Direct Line: 509.321.3939
Direct Fax: 866.652.8834

Please remember to choose Stewart Title of Spokane on your next transaction!


One response to “Today’s Real Estate News 10-10-2011

  1. Michael Mullin

    October 11, 2011 at 10:03 am

    Anthony, you asked is it simply an alarmist piece trying to create bad news where there is none. Are denials up, or down?

    I’m very passionate about how WRONG the mainstream media has about the issue and I’m also very curious about who is spearheading the spin. The Mortgage Bankers Association is most commonly quoted as the source of the facts but I don’t know what they gain by spreading this fear. My point is that I’m convinced some business group at a high level has a vested interest in making consumers feel like there’s a problem with lending.

    Let my preface my comments by saying I recognize being turned down for a home loan by a family is a very emotional issue, and in some cases financially burdensome issue (if you can’t refinance to a lower payment). And I’m sure there are a small percentage of people who probably should qualify for a loan but can’t.

    I’ve been lending for 21 years and from my perspective the only large segments of borrowers being turned down are:

    • People with less than 620 credit scores. Even this isn’t entirely accurate as FHA will go below 600. Having said that – if you have a 620 score you more than likely have a recent and ongoing credit problem. It’s hard to have a good credit history of paying bills on time and be under that mark. I’ve even seen credit reports in which the borrower had a short sale or a bankruptcy within the last two years and still have a high 600 credit score.

    • Investors who have more than 10 financed homes, and they want to buy more. No slight against investors but I’m not concerned. Fannie Mae, Freddie Mac, FHA, VA, and USDA never had it in their charters that they were supposed to support investors. They are there to help families buy a home to live in.

    • Self-employed people who are no longer allowed to lie about their income. I realize “lie” is a very strong word but that’s the best generalization as to what happened with the Stated Income loans that no longer exist. I have plenty of self-employed customers who can provide tax returns that demonstrate they actually make money. In most cases a self-employed person whose tax return shows a very small net profit really didn’t make much money. I have seen very few tax returns where the amount of non-business related expenses amounted to more than a few thousand dollars. And frankly that’s the excuse most self-employed people give me who don’t report enough income to qualify. Their comment is almost universal – “Mike, you know how it is to be self-employed. You don’t report all your income and you over report you expenses.” Um… no, I don’t understand. First, that’s illegal and second, you can’t lie to the IRS and then get mad because a lender won’t give you a loan. But even that is a falsehood. Most of these types really DON’T make any money. They just don’t realize they are spending almost as much as they make. . I’ve never had a problem claiming all my expenses to run my business and still show a healthy profit – not have dozens of self-employed people we’ve seen get approved.

    • Someone how truly has no down payment. Not a problem – FHA still allows for a 3.5% down payment and you can go out to the countryside and buy with a USDA loan with zero down.

    The article you linked to never answer the question of whether the 30% should have been denied for a loan. Are they implying everyone should be approved?

    Quote from the article – “The New York Times notes some of the biggest reasons for rejection are buyers coming with insufficient income, bad credit (applicants with FICO scores below 620 are usually rejected, although some lenders are rejecting anyone below 660); and low appraisals.” And this is a problem? They can’t afford the home (so buy something less expensive), they have bad credit (FHA will lend in 24 months after a BK. I’m not advocating everyone file BK but I’m just pointing out it’s not that hard to rebuild your credit in a short period of time. And it helps if you pay your bills on time. ) or the home doesn’t appraise high enough. I suspect that last is just applicable to refinance clients who are underwater. In the 4 years I’ve been operating in both Easter and Western Washington I have not had one low appraisal yet with someone buying a home. I actually had one last week here in Spokane that appraised at $170,000 and the buyer only paid $160,000!

    Quote from article – “What’s more, lenders usually want a two-year history of income so applicants who have changed jobs recently may face hurdles. “It’s common to get turned down if you have a gap in employment history over the last two years,” Erin Lantz, the director of the Zillow Mortgage Marketplace, told The New York Times.” Both statements are pretty general and I wouldn’t worry about it. You CAN change jobs within the last two years and still get approved and even some unemployment is ok.

    So hype or reality? Almost all hype Anthony, and I wish I had a wider audience.

    For now I’d part with a message to all those banks that are turning down 30% of their applicants – please send them my way! I’m sure we can turn at least some of those into approved loans.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: