Notes and Opinions from one of Arizona's Most Trusted Loan Teams

Last week Fed Chairman Ben Bernanke finally put something into words the rest of us have known for 2 years. Mortgage credit underwriting is too tight! Chairman Bernanke's comments came at a time when increasing government oversight and direct involvement in the mortgage industry have made it harder than ever to obtain mortgage financing, even as rates hit all-time lows.

The last two years have seen a system evolve that is picky to the point of silliness, non-responsive, inflexible, and pretty non-caring. Pummeled by the backlash of the mortgage meltdown, banks are looking for the "perfect" borrower. Professional borrowers (Doctors, Lawyers, etc) with 780+ credit scores are being asked for narratives to explain why their income went down last year, even though the reduced income still qualifies for the loan. Duh! Anyone out there hear about this recession thingy we've been dealing with?

Not only are underwriters asking for explanations of the obvious, they are minutely reviewing credit reports for inquiries, new debts, disputed accounts and the like. By the way, if you have a disputed account on your credit report, you may want to finish that up before applying for a mortgage. It's going to be required.

Does this mean it's a bad time to buy a home? Heck no! Rates and prices are the lowest in a decade or more. What it means is that you are going to need a top professional to help you with the process. It means you need to plan more than you might have in earlier years. And, it means you better be aware of the rules before you sign a purchase contract.

We can help with all of these issues. Call us when you need us.