On the House: New rules, but getting a mortgage still tough

I keep asking buyers and real estate agents about access to credit, and whether it's any easier to get a mortgage.

"No problem," is the typical answer.

"I can only speak for us about mortgages, and as of now we are not having any issues," said Emily Tyszka, who recently bought a house in Audubon, Camden County.

Zillow, the real estate search engine, recently reported that in the final quarter of last year, credit tightened slightly, especially for borrowers with low down payments - meaning first-time buyers.

When I checked around this area, however, I found that nothing has been chiseled into stone, at least when it comes to the availability of mortgage credit.

Gary Segal, of Keller Williams Real Estate in Blue Bell, said it may be a bit easier to get a mortgage now than it was at its most difficult - in the aftermath of the financial meltdown of 2008 - but "the process today is more difficult than almost ever."

"It is maddening to the buyers and stressful to all involved in a transaction, and with all the rules changing in August, it appears it will become even more difficult and slower than even now," he said.

Rule changes? I asked Robert Acuff, of Re/Max Services in Blue Bell, to explain.

The changes, effective Aug. 1 and part of the Dodd-Frank Financial Reform and Consumer Protection Act, are intended to make it easier for a borrower to read and understand the cost of getting a mortgage loan, Acuff said.

The new closing disclosure is five pages long and replaces the HUD-1 Good Faith Estimate and the Truth in Lending disclosure, Acuff said.

It must be in the borrower's hands at least three days before the closing, or the settlement will have to be delayed. Currently, a borrower might not see the HUD-1 until the day of closing, he said.

What do the changes mean, as far as Acuff is concerned?

The key to a smooth transaction and settlement with this new process will take excellent planning, communication and teamwork, he said. "It will be more important than ever to make sure consumers are dealing with experienced professionals in each area involved."

Segal said real estate agents are being told that the days of being able to get a mortgage in 30 days are about over and it will be safer to use 45 days.

Frank Dolski, of Coldwell Banker Hearthside in Lahaska, said lenders have not made it easier for first-time buyers, "but are much more thorough to better qualify them in an effort to reduce defaults."

Buyers must do the research and "obtain a referral from a Realtor to find a lender way before they consider purchasing a home," Dolski said.

Patricia Settar, of Berkshire Hathaway HomeServices Fox & Roach Realtors in Mullica Hill, typically uses the same lender for her buyers, "and once he says a buyer is good to go, they are, because he does a more intense prequalification than the typical lender."

Settar said Trident Mortgage, BHHS Fox & Roach's in-house lender, "just sent out a note that they've lowered the credit score to 620, which is the first time I've seen that in a while, so I believe they are loosening the process to make it a bit easier."

Dolski said today's first-time buyers saved money over the last four or five years, "improved their debt-to-loan ratios and are in a better position to purchase their first home."

"Homes are much more affordable than they were before the housing bubble burst," he said.

Yet Segal is still wary.

"It seems most issues in a transaction with 'bank' in the sentence mean a glitch in the credit, a low appraisal, a delay in processing, or some strange twist," he said.


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