Posted on 08/24/2015 6:04:06 AM PDT by SeekAndFind
Last month I bought a house in Potomac, Md., a trade up on my current home, and was shocked to learn in the ensuing weeks that I couldn’t get a mortgage loan. First, I went to PNC bank. Then Wells Fargo. Then another. Denied. Denied. Denied.
No, I don’t feel entitled to a loan, and the banks have every right not to lend me money. But my tale of woe tells a broader tale of what is going on in the lending industry these days.
All the bankers told me the same thing: “Steve, if you’d walked in our bank eight years ago with this mortgage application, we would have rubber stamped it in five minutes and you would have walked out with a bag of money.” But those were the go-go days of the real estate frenzy when people who worked at McDonald’s could walk into a Countrywide and get a $600,000 mortgage. Back then underwriting standards were tossed out the window.
Now, thanks in part to new federal regulations like Dodd Frank with its anti-predatory lending rules, the pendulum has swung to the other extreme and underwriting standards (for those without federal insurance) are absurdly tight. Here we are with the lowest interest rates in 50 years, but many businesses and aspiring homeowners can’t qualify. Water, water everywhere and not a drop to drink.
My situation was doubly frustrating because I’m making a 25 percent down payment on the house. Researchers have examined huge samples of the portfolio of defaulted loans during the 2007-09 housing crisis. Virtually all of the defaulted loans had a low down payment with many less than 5 percent down thanks to government “affordable housing” mandates.
(Excerpt) Read more at washingtontimes.com ...
The common thought in the country is that “owning” a home will make you a better citizen.
The con men jumped in to exploit this common thought.
Home mortgages are not valued now because they produce better citizens. They are valued because the wealth associated with them can be stolen.
I’m sorry, but we are going to have to start hanging thieves in this country. There are too many of them, and they are not afraid of jail.
I wonder what affect this has on VA loans for veterans? Not us old guy, but the new crop of vets from Afghanistan and Iraq.
Sorry, Steve, I'd have denied you too. (Even if it is illegal).
Right, but as you point out, if he had actually bought the house he wouldn’t have a beef right now.
Bottom line is the middle class is suffering from stagnant wage growth, few new opportunities in the job market due to the Obama socialist weak economy, and the HIGH taxes and fees Obama’s socialist economy demands from the middle class to provide the HUGE government programs the cash flow to employ the union workers and transfer the wealth.
Last week, I called Miss Utility to come out and mark the location of some underground lines as I was planning some digging projects on my place. The Miss Utility guy came out in a company car... Latino with little English ability. While working, he gazed at my place and asked if I wanted to sell my farm and for how much.. Idly, I threw off a hefty price and he handed me his card saying he was very interested. He had a landscaping business on top of that job and his girl friend worked at a hair salon and did house cleaning. He wanted to impress his family when they came to America, he said.
My guess is that he would have no problem getting a loan...
No one gets a mortgage - it’s a deed of trust.
My neighbor has a mortgage, written by his Kansas law firm. The only mortgage I know of.
FWIW...
I picked up on that too. And then I read further to see the secondary reasons.
(Crickets)
Home sales are SKYROCKETING across the country. For this guy to be denied means there is more to his problem than he let on.
And his blaming the past mistakes do not help.
I agree but I was speaking of people working at McDonalds getting a $600,000 loan.
Everyone is getting loans except me!!!
Well what did you do?
This guy thinks he deserves a loan he “needs”.
Yep, That's what he wrote. But he mispoke. Out of ignorance, I imagine.
I do this for a living.
Actually lending guidelines have shed some of the sillier requirements in the past 18 months or so.
Underwriters were afraid to approve a loan for too long; now that has changed and good loans are getting approved.
Always exceptions to that of course.
He missed more than two payments to have a low credit score. And it must have been very recent within the last two years.
He also claims to have a 25% down payment. But is that really true?
Perhaps the appraisal came back too low. Perhaps his debt to income ratio was not high enough.
No need to read any further
I have a low credit score and the reason being is because I don't have any credit cards. I have a mortgage and an auto loan and both loans are never late. If I sold my home now I would not qualify for another mortgage. The "credit score" thing is a scam. Unless you have credit cards or other revolving credit you are screwed; "they" want you in debt.
One of the biggest problems these days is you can’t get an appraisal for the contract price.
I threw off a hefty price and he handed me his card saying he was very interested. He had a landscaping business on top of that job and his girl friend worked at a hair salon and did house cleaning. He wanted to impress his family when they came to America, he said.
My guess is that he would have no problem getting a loan...
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My guess is that he is working off the books and has a lot bigger income than either you or me put together.
I know a few nut cases with that kind of mortgage and they are not Doctors or Lawyers they are working class like me. I can’t for the life of me figure out why the bank would give such a loan let alone how they can afford it.
If you are low income you can still get a mortgage loan with Fannie Mae and taxpayers are on the hook for it.
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