With all the national hubbub about the lending industry, where do we currently stand, and can the every day home buyer or small scale investor get a loan in today's banking and lending environment?
A recent study by the Perryman Group, Ltd., a research group based out of Waco, Texas, reveals some surprisingly optimistic news.
1. The worst could already be over for banks and financial institutions in terms of defining the problem.
2. Cleanup of the proplem has begun in earnest.
3. Defaults, which are still only half of what they were in the 1980's, are already stabilizing.
4. Interest rates are still remarkably low compared to those 20 years ago.
Overall, the article reveals that the financial and housing sectors are due for a recovery by the end of 2008, and an even bigger recovery over the next few years.
http://theaustonianblog.typepad.com/theaustonian/files/ray_perrymans_report_for_the_austonian.pdf
What we have seen recently in our own business is that clients who would have previously applied for a no documentation loan (meaning that they simply stated their income rather than providing any solid documentation) are now having to jump through a few hoops in order to get loans. They can no longer be picky about their interest rates, and many are simply having to wait until their credit score improves or until they can show proof of income in order to get a loan at all. While this is certainly a hard time for prospective home buyers, at least the news from this study appears promising on the horizon.
If you have questions or would like to discuss your options with us, call 512-454-8955.
Comments