Gay Realtor on Why Getting a Home Loan is so Difficult

(GayWebSource.com) – Denver, CO by GayRealEstate.com Nov. 6, 2012 – As the United States government has bailed out Fannie Mae and Freddie Mac, lenders are using a stringent set of rules to check out the income and viability of potential mortgagees.

Lenders, once running the show, are wary of utilizing third-party appraisers with government certifications, as these financial institutions are used to doing things with their own people. Government involvement also means compliance checks, which, inevitably means more staff. Yes, the federal government has taken the heart and soul feel out of the lending market. This might seem like a good thing, but when one looks at the inefficient process involved, all the additional appendages business must now wear in order to exist, there is every likelihood that the heavy burden of the new process is great enough to break the spirit, if not the nerves, of a very many potential home-owners.

These post Mae and Mac bail-out days, there are forms to fill out which, if missing one item, will be automatically rejected. The ability of a company these days to lend out money depends on the ability of the applicant and all parties involved in appraisal of the property to fill out a series of forms which rival the length of the application to run for public office. In fact, we’re sure Mitt Romney has disclosed less to run for President of the United States!

If an error exists, the mortgage applicant is not notified of the problem, only that the application has been rejected and the process must start over at the beginning. What this means is there will potentially be another application for bank and loan officers, tax officials, compliance officers and quality control officers to check over and review, all this occurring before the loan can even be processed and considered.

With the new set of regulations regarding lending, gay realtor reports the lending institution is now compelled to go with a third-party appraiser. An appraisal on a home today is a carefully guarded service, with the lending institution having absolutely no say in which organization sends out its people to assess a home for the purpose of securing a loan. Instead of value being checked by a market, a pseudo-government bureaucrat is given the power of assigning value to a house in a market which all too often says that homes are no longer worth what they were. This has driven appraisal averages down (which cause deals to crash), as the bureaucrats need to be more in line with the lower boundary of possible value in order to protect the lenders and, therefore, the American economy.

With all the artificial restraints added to the housing lending markets, and of course some with cause… come additional staff to do things such as compliance checks. These staff members have the job of checking the forms which have been filled out for the purpose of securing a loan, and rejecting any with errors. This means one digit out of place is a rejection, and these agents have nothing but punitive measures to suffer if they miss one, as punishment rolls down hill, and the government has little tolerance for entities which do not abide by the rules.

The government has terms like “fraud” at their disposal, and may use them in a court-room at any time to shut down a lender who is not filling out forms with all the t’s crossed and dotting the i’s. Gay realtor has experienced once frivolous and easy loans for anyone, to inefficient and redundant, that is what the process of obtaining a home loan has become.

Long, redundant forms must be filled in completely, with the smallest mistake punished by a rejection. Taxes must be submitted, proving an income suitable to the loan size, and this must happen in an economy recovering from a recession brought on by a failed housing market. Appraisals by outside, third-parties are no longer in house, and do little to bolster the confidence of a shaken lending community. Compliance officers and quality control staff add to the time it takes to process an application, making this entirely inefficient process even more full of delays than if the government stepped in and took over the lending market entirely.

Not to mention as previously reported, the tendency of some lenders to now “cherry pick” which loans they will do… accepting only the cream-of-the-crop, leaving the majority to wonder when some balance will return to the market.

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