Mortgages Harder To Get

August 31 2008 - Mortgage brokers warned last week that despite an uptick in sales of existing homes in July, the environment remained challenging for homebuyers.

Banks, already burned on foreclosed subprime and prime loans, are demanding 20 percent down payments, credit scores of 700 and above and debt-to-income ratios of 45 percent - much higher than they have been over the past several years.

And even then, banks are not satisfied.

“I have seen lenders Google borrowers’ names for any hidden dangers and call borrowers’ employers to find out if their job status is secure,” said Bob Moulton, of Manhasset, NY-based Americana Mortgage Group, a 20-year veteran of the residential mortgage game.

“Lenders are also requiring borrowers to have cash reserves, like three months payments,” said Ellen Davis, with Somerset Mortgage Lenders, in Melville, NY, which is still writing plenty of mortgages but seeing many more applicants surprised by the tougher requirements.

HOUSE HUNTERS - MORTGAGES HARDER TO GET
by RICHARD WILNER