Search
Exact matches only
Search in title
Search in content
Search in comments
Search in excerpt
Filter by Custom Post Type
{ "homeurl": "http://rismedia.com/", "resultstype": "vertical", "resultsposition": "hover", "itemscount": 4, "imagewidth": 70, "imageheight": 70, "resultitemheight": "auto", "showauthor": 0, "showdate": 0, "showdescription": 1, "charcount": 3, "noresultstext": "No results!", "didyoumeantext": "Did you mean:", "defaultImage": "http://rismedia.com/wp-content/plugins/ajax-search-pro/img/default.jpg", "highlight": 0, "highlightwholewords": 1, "openToBlank": 0, "scrollToResults": 0, "resultareaclickable": 1, "autocomplete": { "enabled": 1, "googleOnly": 1, "lang": "en", "mobile": 1 }, "triggerontype": 1, "triggeronclick": 1, "triggeronreturn": 1, "triggerOnFacetChange": 1, "trigger": { "delay": 300, "autocomplete_delay": 310 }, "overridewpdefault": 0, "override_method": "post", "redirectonclick": 0, "redirectClickTo": "results_page", "redirect_on_enter": 0, "redirectEnterTo": "results_page", "redirect_url": "?s={phrase}", "settingsimagepos": "left", "settingsVisible": 0, "hresulthidedesc": "0", "prescontainerheight": "400px", "pshowsubtitle": "0", "pshowdesc": "1", "closeOnDocClick": 1, "iifNoImage": "description", "iiRows": 2, "iiGutter": 5, "iitemsWidth": 200, "iitemsHeight": 200, "iishowOverlay": 1, "iiblurOverlay": 1, "iihideContent": 1, "loaderLocation": "auto", "analytics": 0, "analyticsString": "", "show_more": { "url": "?s={phrase}", "action": "ajax" }, "mobile": { "trigger_on_type": 1, "trigger_on_click": 1, "hide_keyboard": 0 }, "compact": { "enabled": 1, "width": "200px", "closeOnMagnifier": 1, "closeOnDocument": 0, "position": "fixed", "overlay": 0 }, "animations": { "pc": { "settings": { "anim" : "fadedrop", "dur" : 300 }, "results" : { "anim" : "fadedrop", "dur" : 300 }, "items" : "fadeInDown" }, "mob": { "settings": { "anim" : "fadedrop", "dur" : 300 }, "results" : { "anim" : "fadedrop", "dur" : 300 }, "items" : "voidanim" } }, "autop": { "state": "disabled", "phrase": "", "count": 10 } }
Select Page

RISMEDIA, July 26, 2010—(MCT)—David Kosowski has a full-time job, a sky-high credit score, a solid debt-to-income ratio and enough cash stashed away to put a 20% down payment on the three-bedroom, two-bath home he’s had his eye on since spring.

But when he applied for a mortgage to cover 80% of the $495,000 purchase price of the Coral Gables, Fla., home last month, he was flatly denied.

His story is one that has played out with head-scratching regularity across the troubled housing market, industry analysts say, even as mortgage rates have dropped to historically low levels.

The average interest rate for a 30-year fixed-rate mortgage sank to a record-low 4.56% this week, according to government-sponsored mortgage buyer Freddie Mac. Fixed-rate 15-year mortgages dipped slightly to an average 4.03%, also a record.

But even as rates fall, lenders are raising the bar ever higher for applicants, making it harder for even financially-stable home buyers to qualify, and in some cases making homes affordable only to those able to pay with cash.

Kosowski, who seems to have weathered the recession and the housing market downturn better than many—he’s employed and has considerable equity in the three-bedroom home he purchased 10 years ago—said his application was rejected because the company he works for (and owns a 25% stake in) saw its earnings drop between 2008 and 2009.

That was enough, he said, for the bank to turn down his loan application—despite his 817 credit score, a history of meeting all debt obligations and a 21% debt-to-income ratio.

“They asked me to explain the earnings decline,” he said. “I wrote a letter explaining that the economy had been down in 2009, and the next day they said the loan was denied. I was very surprised.”

Steve Schneider, his mortgage broker, and owner of Greenwich Title Services in South Miami, said he was surprised as well. “His credit is as good as anyone I’ve ever worked with,” he said. “He should’ve flown through.”

Such rejections would have been unheard of a half-decade ago, when credit was flowing freely, often to people who couldn’t afford the homes and condos they were buying, said Doug Dewitt, a Miami-based real estate broker.

“Now the pendulum has swung completely in the other direction, and lenders are making you very accountable in terms of your credit history,” he said. “It’s like they don’t want to write one more bad loan.”

With South Florida’s housing market still struggling to recover from record-high foreclosures, toppled home values and a glut of inventory, the ease with which banks now turn down applicants is nearly unprecedented, he added.

Potential borrowers are being denied access to tantalizingly low interest rates for reasons ranging from insufficient down payments, to a less-than-perfect credit history, to concerns about the property or buildings they hope to buy into.

The current interest rates are so desirable because they translate into significant savings in monthly and total payments for home buyers. For example, someone getting a $250,000 home loan in July 2010 would save an average of about $155 each month, compared to someone getting a similar loan last July, when the average 30-year fixed interest rate was about a percentage point higher.

Mortgage lending in 2010—down about 50% from early 2009—has shown a complete 180-degree turn from the home lending practices that reigned before the housing market bubble burst, and represents yet another obstacle stalling a recovery in the housing market, those who track the industry say.

Kosowski had very little trouble getting a loan for the home he bought back in 2000, when his income was lower than it is today. As he looked to move into a bigger home this year, the stack of paperwork he had to fill was considerably thicker than it was 10 years ago.

“It’s night and day,” he said, comparing the two loan application experiences. “I had to give about a quarter of the information that they ask for now, my income was significantly less than it is now, and there was no problem getting a loan. It’s almost like they don’t want to lend.”

The low-interest rates have done little to spur activity in the housing market. Last week, the number of mortgage-loan applications for home purchases dropped to its lowest level since the 90s, the Mortgage Bankers Association found. Nearly four out of five applications were from existing homeowners looking to refinance, many of them rejected because of insufficient or nonexistent equity.

Despite prices that have fallen drastically in the past five years, traditional home sales to traditional, middle-income buyers have been pushed to the margins.

With the expiration of the federal home buyer tax credit and many still worried about losing their jobs, the stiff lending requirements of banks offer up yet another reason for the average person to not buy a home.

Kosowski, who works for a lighting manufacturing company, ended up paying cash for the Coral Gables home in June, and is hoping to get a refinance loan soon.

Greg McBride, senior financial analyst for Bankrate.com, predicted that mortgage rates would remain low for the foreseeable future, but it will take more than low-rates to spur a recovery.

“Low mortgage rates alone are not going to revive the housing market,” he said. “People are still nervous about their jobs, and reluctant to take the plunge into home ownership. And the market continues to be plagued by a very high level of distressed properties.”

(c) 2010, The Miami Herald.

Distributed by McClatchy-Tribune Information Services.


Buying/Selling Consumer Luxury National Spotlights
500176368
Commentary: The Historic White House United State of Women Summit

Editorial Note: The following is a commentary written by Desiree Patno,...

123073479
Do You Know the Best State for Homeownership?

Owning a home is usually considered part of living the American Dream. But...

509172408
Homeownership Still Desirable for Millennials

The majority of Americans still value homeownership, but millennials face major...

Agent Broker Coaching Lead Gen Teams
Couple sitting in their electric car
Save on Your Summer Road Trip

NAR PULSE—Right now, until August 31, you can save $25 on...

499147276
Ask the Expert: What Is the Most Important Business Component?

This week’s “Ask the Expert” column features Martin J. Rueter, President...

487575270
Don’t Miss Out: Recent Grads Bring Big Potential

Graduation season has come to an end and the celebrations have...

Agent Best Practices Branding Broker Niche
La Habra, United States - July 12, 2016: Macro closeup image of pokemon go game app icon among other icons on an iphone smartphone device. Pokemon Go is a popular virtual reality game for mobile devices.
Pokémon GO for Real Estate – Must or Bust?

If you’re anything like me, your social media newsfeeds look a...

Man inputing data on laptop and holding mobile phone in another hand.
Boost Your Online Presence with More .REALTOR Options

Website addresses that end in .REALTOR provide instant recognition as a...

Person. More>>
4 Ways to Update Your Digital Persona

Your digital presence is more important than ever, and now is...

Agent Apps/Gadgets Best Practices Broker Innovation
Silhouette of business people moving and joining pieces of jigsaw puzzle on a business and stock market  blue background, with charts, diagrams, world maps and data arranged on grid and tables. World maps showing continents and countries with economy data and growth diagrams. Light glowing from the center. Copy space on bottom.
PNC Offers Online Business Insights, Webinars and Tools for Agents

Looking for the latest real estate industry information, education and networking...

Woman holding tablet
Stay Connected to Your Business When You’re on the Go

As a busy real estate professional, you’re likely most productive when...

snapchat_real_estate_665x350
Why Snapchat Is Pure Gold for REALTORS®

There is a huge amount of attention being paid to Snapchat...

Business Insights Content Generation Marketing Trends
000027558128_Double
Webinar Recap: Build Your Brand with Next-Gen Social Media

If you’re working in the real estate industry, you already know...

000042086008_Double.jpg
Expanding Your Client Base through Social Media

Today’s buyer will search online at some point during the buying...

Facebook_Live_665x350
Facebook Live the Latest Trend to Infiltrate the Open House Scene

Drumming up interest in an open house may be about as...

Buying/Selling For Your Clients Home Improvement How-To Lifestyle
468752934
5 Kitchen Island Styles to Fit Any Use

Regardless of the size of your kitchen remodel, adding an island to...

Wall_Panel_450x300
Luxury Wall Panels Take Home Décor to a Whole New Level

Looking to revamp your living space? Before you head out to...

482805813
8 Ways to Stop Worrying about Money

(TNS)—Are worries about money keeping you up at night? You’re not...

manhattan
RISMedia’s CEO Exchange

RISMedia’s 2016 Real Estate CEO Exchange September 13 & 14, 2016...

Capital Building, Washington
RISMedia’s Power Broker Forum at the NAR REALTORS® Legislative Meetings & Trade Expo

RISMedia’s Power Broker Forum at the REALTORS® Legislative Meetings & Trade Expo...

PB-annual
RISMedia’s Power Broker Forum, Reception & Dinner – Annual

RISMedia Power Broker Events 2016 Orlando, Fla. Friday, November 4, 2016...