Indianapolis—Nationwide home prices are down 30% from their peak in 2006 in the years before the bottom fell out of America’s real estate industry. Now that mortgage companies and the housing market are poised for a comeback, some potential customers say tough new loan regulations are keeping them out the game.
Don Frommeyer, president-elect of the National Association of Mortgage Brokers, tells Fox 59 News that lenders are still looking for character, capacity, collateral and credit when loaning money to buy real estate…but their requirements are tougher than years ago when 110% value mortgages were advertised on television and just a phone call away.
“They do their own quality control checks now on the lender’s side pretty deep,” said Frommeyer. “There’s companies now where they type in the name and address and the customer’s social security number and they can tell if they own property in another county, in another state. That has come up a couple times…can you tell me why how owns a piece of property in California and we never knew about it?”
Frommeyer says mortgage brokers and bankers are demanding higher credit scores, larger down payments and more documentation than in the past.
“You’ve got lenders now that are delving into people’s assets. The more assets you have the better chance you have of getting a loan.”
Tommy Jones says his recent attempt to buy a home has him jumping through more financial hoops than ever.
“Back when the housing market was doing good people was doing false loans and I heard so many stories,” said Jones. “There’s a bunch of empty house everywhere and they’re still building houses out there so why is it so hard for us to get a home if they still building houses for people?”
Jones says if his mortgage company doesn’t close on his loan this coming week, he will lose the incentives that will allow him to move into the Boone County home at an affordable rate.