NAR Reports Tight Financing, Credit Conditions

credit to Jed Smith

Each month, shop the National Association of REALTORS® gathers up-to-date and on-the-ground incisive comments from REALTORS® who participate in the REALTORS® Confidence Index (RCI) survey. The RCI survey tracks expectations about overall market conditions, doctor buyer/seller traffic, price, buyer profiles, and issues affecting real estate.  The November 2012 survey was conducted during November 26 through November 30, 2012. All real estate is local and conditions in specific markets may vary from the national trend.

One of the major concerns is the tight credit conditions. Access to financing remains  difficult, benefting cash buyers, and the process remains protracted, causing delayed closings  and risking cancellations.  There are reports that banks are asking for higher credit scores, with a report of a bank rejecting a score of as high as 800. There is also lack of assistance for helping current homeowners who are slightly delinquent to modify keep their homes. Here is what REALTORS® are saying:

  • Financing taking too long (underwriting/processing with a radical amount of multiple review creating a back log) which results in confusion in the final days leading up to closing.
  • Lenders are not making closing dates.  45-60 days are being given per contract and we are seeing as much as a 2 month delay in closings.
  • The mortgage industry is continuing to be in a difficult process. They are taking the process to the extreme and even offending strong buyers with credit scores in the 800?s.
  • 35% of my buyers contracts have been terminated due to lenders and underwriters changing qualifications in the process, and buyers losing money for inspections and appraisals
  • Lender are being more aggressive (in a good way) working with Short Sales. They need to be more aggressive with Loan Modification.