March 21st, 2008 8:48 AM by L. Michael Trenkle
Just when consumers and the U.S. economy need banks to lend more freely, the mortgage industry is making it harder to borrow — even for those with good credit.
Mortgage insurers, whose backing is required for borrowers who can’t afford the traditional 20 percent down payment on a home, have already flagged nearly a quarter of the nation’s ZIP codes where they refuse to insure some home loans.
That encompasses a wide variety of neighborhoods: McMansions in Scottsdale, Ariz.; luxury Miami condos; 1960 ranch houses in Flint, Mich.; and early 20th century kit homes in Metuchen, N.J. and condominiums in Las Vegas.
The entire states of California, Florida, Arizona, Michigan, Ohio and Nevada — which have seen the highest foreclosure rates and the worst price declines — are blackballed on some mortgage insurers’ lists.
Banks that have lost billions because of bad bets during the housing boom are now reverting to strict lending standards not seen in nearly 20 years, according to industry data and interviews with lenders.
For new home buyers and those seeking to refinance, it can mean higher down payments and a higher bar for credit scores, among other requirements. The toughest restrictions are in markets where home prices are falling, though regions where property values are rising are not immune.
Luckily for all of us in Colorado, MK Mortgage has the ability to lend to those who may not have 20% down. MK Mortgage Has built exceptional relationships with several lenders. These lenders are willing to work with a select number of brokers, nationally, to lend more money and provide fantastic financing opportunities that do not require mortgage insurance or the risks of adjustable loans.
We’re in the midst of an epic, broad, sweeping change in the mortgage industry, But this does not mean the end to several good opportunities, if you know who to talk to when looking for a mortgage.