Buying Homes In Today's Mortgage Market

Do you know the term ”Fallout Rate” and what it means? Do you know what “Trailing Spouse” doctrine is? Do you know what the requirements for contact are for VA Appraisers? Did you realize mortgage companies across the board are coming up with new and different “conditions” which frustrate Buyers and Sellers?Mortgage companies are being so cautious in today’s real estate market in loaning money to “A” clients that the fallout rate on them is at 50%. Fallout rate is the rate at which “A” credit clients will be rejected from approval of a loan. Is that scary or what? The fallout rate was, for some companies, at 80% just a few short months ago!Trailing spouse means the person who gives up their job in order to follow the other person in a relationship to a new location where that person has found employment. Even government credit unions are denying loans for “A” credit customers unless the trailing spouse has secured their job in the new location.VA Appraisers have up to 1 week to respond to an order from the VA for an appraisal. Then, they must respond within 1 week after appraisal to supply their report. New conditions which might be seen when getting a loan are:1. When the clients are not able to sell their home and the move is mandated by their employer, clients must rent out their home to qualify for the loan. The lender might give them 75% value for the rental payment instead of the 100% value of the rent received.2. Lenders are now requiring letters from clients in which they must write a letter stating they acknowledge that they are close to an airport and that the noise generated will not be a concern for them.3. An appraiser is to submit a letter stating the value of the rent being sufficient for the area of the residence which was rented out. Even though the Federal Appraisal Oversight Committee is clamping down on appraisers giving price opinions on properties.4. W-2’s to be provided for verification of income EVEN when the client did not work and was a full-time college student.These are some of the situations in which Buyers may experience which,in reality has an effect on not only the Buyers but the Sellers, REALTORS, inspectors and title company escrow officers. Many delays and cancellations of contracts are occurring due to these special conditions which are required by lenders who, in this author’s opinion, are operating out of fear. That fear is from having to shut their doors due to the housing market crisis to being audited by the Federal agencies which oversee the day to day mortgage business.