Friday Facts August 27, 2010

TOP 7 REASONS BANKS ARE DENYING HOME LOAN REQUESTS:
1. Poor credit. Even FHA loans have an average credit score of 693.
2. Insufficient liquidity. A heavy down payment (20-30%) & strong excess liquidity are needed.
3. Lack of income. Consistent proof of income for 2-5 years
4. Lying on the application
5. Debt. Debt to income ratio exceeds bank’s guidelines
6. Unemployment
7. Self employment
§ Make sure you warn your clients to stop using their credit cards – especially for large purchases while they’re waiting to close on a property. After June 1, 2010, Fannie Mae instructed lenders to pull an updated credit report just prior to closing. Your buyers could be approved, and a change in their DTI could result in the loan being pulled.


§ Comment from RealTrends: “While those who study the housing market look a various data to report on trends, what brokers and sales professionals know right now is that written business has fallen in most markets since April, that inventory is rising and that sellers remain stubborn about pricing their homes where buyers will buy. We continue to be bullish long term, but for the remainder of this year, business will likely be down from the same period last year … Focus on finding and serving every potential client and customer and watch costs religiously for the next 12 months.”

I looked at CC&IMLS Barnstable County stats for July, and here’s what I found: July 2010 dollar volume is 62.29% of June 2010 (down 37.71%), and 88.73% of July 2009 (down 11.27%).

A University of Texas study of 60,000 residential real estate transactions, listings that mentioned new paint, new carpet and/or roof work sold, on average, for slightly less than those that did not.

KnowYourOptions.com is a new Fannie Mae site designed to help homeowners stay in their homes.