After a decade in the mortgage business, Derek Parent has seen a lot of change. Particularly in the past few years, many long-held rules and practices have been tweaked to protect lenders. But finally, Parent said, the government got one right for the consumer.
For years, the word “dispute” showing up on a credit report was the death knell for loan pre-qualifications. Recently, the FHA and HUD finally relaxed that rule, potentially opening the door for a couple hundred thousand more homebuyers around the country, Parent said. The local branch manager of Paramount Residential Mortgage Group said the growing rate of identity theft in the country fueled the change.
“People are constantly battling stuff on their credit that’s not theirs,” he says, “and it’s been holding up even high-net-worth people from closing loans.”
While more buyers may be a good thing on the surface, they come at a time when the supply/demand equation is off kilter. Available homes without offers on the resale market have dipped below 3,000 units, far from the 10,000 or so on any given day last year. Bidding wars are in full swing again, with more than 50 percent of buyers purchasing with cash.
Parent said he often hears of real estate agents complaining about the problem. “We still pre-qualify about 30 people a month,” he says. “But sometimes it takes four to five months to get a loan closed because they can’t find a property.”