To Prevent Future Virginia Foreclosures, Lenders Tighten their Belts
Foreclosure made acquiring a loan very difficult. Even a credit score of 775, as Peral Carrington has, seem to be inadequate to bag a loan. But after cleaning up all credits using their $7,000 tax return, a $220,000 loan was finally approved.
The lenders seem to be more careful in granting mortgages for most cases end up in foreclosure. This may be a compensation for granting too much loans (even to those with poor credit history) during the period of good housing sales. And because foreclosure is still rampant in states like Virginia, the lenders want to stop losing more money.
A survey by loan officers found out that for 3 months, around 70 percent of the banks had increased their qualifications on loans.
Jessica Johnson, a Virginia Beach renter-of-5-years wanted to settle on a $200,000 listed house. When they finally have saved enough to buy a home that was when underwriters have become strict to prevent more foreclosures in Virginia. The bankers demanded that his husband must be stable on a job at 40 hours per week. And since a brick mason is seasonal their American dream was put on hold.
A senior officer in the National City Mortgage in Virginia Beach said that there is still a lot of money for credit it is just that lenders have to be smarter. A credit score of less than 600 and lines of loans to pay or a history of foreclosure may not be good.
If this is hard, next year (with potential foreclosures on sight) would be tougher as Federal Housing Administration announced that instead of the old 3 percent down payment, it will be 3.5 percent.
This drastic change may cause in the reduction of potential homebuyers says Skip Templeton, senior consultant of Virginia Home Mortgage.
Now, potential purchasers are now putting their interest on hold either they don’t have their loans or they are waiting for the market to fall further.
