EVEN GOOD BORROWERS HIT WITH STRICTER CREDIT RULES!
60% OF BANKS TIGHTENING STANDARDS FOR "NON-TRADITIONAL" MORTGAGES - JUMBO LOAN ORIGINATIONS DROP!
I just spotted this article by Sudeep Reddy in today's Wall Street Journal Online. It reviews a survey, conducted in October, 2007 by the Federal Reserve Board, of Senior Loan Officers. The survey was taken before the Fed lowered it's benchmark interest rate to 4.5% on October 18th.
Many banks are also tightening requirements for business loans, although credit card lending practices remain little changed. The highest scrutiny for home buyers involves those seeking sub-prime loans, or Jumbo loans - mortgages exceeding $417,000 borrowed. The Senior Loan Officers report that interest in these Jumbo loans has decreased substantially in recent weeks.
Our Team is finding this credit tightening manifesting itself in our transactions here in Chicago. In recent weeks, buyers of our listings have been asked for additional verifications of income and credit inquiries close to the scheduled closing, as well as increased review of property appraisals. Although our Team is selling real estate, and these sold transactions are proceeding to closing, these last-minute re-verifications are causing some stress for home sellers and buyers alike.
Contact us anytime if you'd like to further discuss.
DEAN'S TEAM LEADER,
DEAN MOSS
