November 8th, 2012 12:30 PM by Rob Robbins
The election is over and we know who will be leading our country the next 4 years. I have concerns that changes needed in finance policies may not happen.
The Dodd-Frank Law has been slowly implemented to the banking industry and as the months go by more of it is being executed. There is great concern in the banking industry and confusion since the law is not specific with details. That being said the banks are making their own decisions in a very conservative way which is going to the extreme. All due to the lack of specific details of the law. Some changes were definitely needed but many issues we are facing now were unintended consequences.
Here is what I can share with you in real life situations in Branson, MO. This is not just affecting residential housing. It goes far beyond that. Land purchases, commercial businesses, self employed borrowers, investors, second home buyers, condos, developers and ministry purchases.
The last contract I wrote for a person with 20% down, high credit score and a good income for a second home at a very attractive price was asked to remove all appliances from the contract. They were considered personal property. What? Some of the appliances were built in. I argued the point and got the underwriter to accept leaving the appliances in the contract but stating they had no value. No value? Have you went shopping for appliances lately? Do you think that underwriter's home had appliances when they purchased it and glad they were there to save them some out of pocket expenses? This one should have been easy and a no brainier.
Get this! If you are getting a FHA loan or an USDA loan because you do not have 20% to put down for a conventual loan the property has to have appliances for the loan to be approved. Hello! The reason for this is to protect you from additional out of pocket expenses that may affect your ability to make your payments and have a home you can live in after the purchase.
If you want to purchase land or a lot you will need a minimum of 30% down if you really do not need the loan or 40% down if you really need the loan.
Condos with nightly rental in the development will be at best a 5 year ARM loan with a local bank. My advice is just figure on paying cash. It is way easier. You are buying them at huge discounted prices anyway.
If you are planning on purchasing a property of any kind within the next 6 months using a loan, I would strongly recommend moving up your time table. As this situation moves forward it will get worse before it is better. Getting a loan today is going to be way easier than it will be in just a few months.
Will the government make some changes to improve the situation and help real estate? Yes, I think they will once we are not selling anything again and you know how fast they react. It could take a couple of years of more depressed markets before that happens.
How many times did either candidate talk about what they were going to do to help the housing market specifically and was it discussed in the debates? I will leave that answer to you.
Rob
