Residential Loans
The foreclosure crises have created a lending crises. Residential loans are hard to obtain. Lenders require much more from the borrower.
Lenders want the borrower to have more money for a down payment. The days of easy loan qualifying and getting 100% of the money needed to purchase a house are gone. Now when lenders request 3%, 10%, or 20% of the sales price, the lenders mean funds easily verified by a bank statement, not a 2nd loan on the property.
Lenders require the borrower to have a higher FICO score. Lenders are not willing to loan to people who have trouble paying their bills on time.
Property values are declining in most, if not all, of the U.S. That means the appraised value of the home may be less than the purchase price. If the appraised value is less than the purchase price, the borrower must pay the difference or get the seller to lower the price.
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