Pinetop White Mountain Blog

Good Afternoon Everyone,

I thought today I would address some realities in today's lending climate.  In a word, it's tough!  With the Foreclosure and Short Sales having dominated the marketplace for the past several years the lending institutions, particularly any Fannie or Freddie Loans have gotten extremely tight in their underwriting standards.

If you are a First Time Homebuyer or you are buying a primary home, it is much easier because you can go through Government Backed Programs like FHA, VA, or USDA.  However, if you are a second home buyer or an investor, be prepared to jump through hoop after hoop in acquiring a loan.  There will be documentation like you have never seen before and you will be asked to sign many disclosures stating the purpose of the purchase.  If you are investor, be prepared to practically sign away your first born child in order to get a loan.  If you are second home buyer you will have to put more money down than you might expect and again, you will be required to disclose over and over again what the intended use of the property is going to be.

I just had a sale fall apart today because the buyer refused to sign a disclosure stating that the property was going to be owner occupied and that they would be full-time residents of the property within 60 days of closing.  Why, because they already owned a home and the Lending Institution didn't believe they were going to use it as a Primary Residence.  The truth of the matter is that they were buying a home that needed a good deal of work before it was going to be ready to move in to.  The time frame the lender wanted was just too short to accomplish all that needed to be done and there were veiled threats from the lender that the buyers were likely to be checked on to see that they were living in the home within that 60 day time frame.

It's all about politics and the attempt by the Banks and the Government take control of the Real Estate Industry.  If you can't pay cash for your second home you probably are going to have a problem buying one!  It's about the Redistribution of Wealth so that money you have in your Investment Accounts or in Savings can be used by the Banks to help someone less fortunate buy a home.  It is about controlling the flow of money in this Country and limiting those who have worked and saved from bettering themselves, rather it should go to someone who truly can't afford a home but wants one. 

I usually keep my political views out of my posts but today I just had to vent a bit.  It really makes me angry that a well qualified buyer with outstanding credit scores must jump through hoop after hoop in order to buy a home, but someone with little of nothing can walk in to a lending institution and the lender will bend over backwards to get them in to a home, even if they really aren't qualified to own one. 

Don't get me wrong, I'm all for First Time Homebuyers getting homes to raise their families in, but when a qualified buyer can't buy because the lending institutions have taken the attitude that anyone who is buying a second home must be an investor or have plans to flip that home with absolutely no reason other than their own poor lending records of the past, it burns me up and it costs me money.  I don't like the Banks taking money out of my pocket because their own standards of the past were so bad that they have gone to the opposite extreme in today's market. 

Until next time....

Sandra Paulow, Associate Broker, GRI, SFR, REALTOR® (928) 242-0300