Credit Conditions Continue to be Tight

Each month, the National Association of REALTORS® obtains up-to-date and on-the-ground incisive comments from REALTORS® who participate in the REALTORS® Confidence Index (RCI) survey. The RCI survey tracks expectations about overall market conditions, buyer/seller traffic, price, buyer profiles, and issues affecting real estate.

The selected comments reflect the general sentiment expressed by REALTORS® who participated in the October 2012, conducted during October 22 through November 5, 2012. All real estate is local and conditions in specific markets may vary from the national trend.

Tight Financing/Credit
REALTORS® reported that access to financing remains tight, so cash buyers, who are typically investors, are winning the bids against first-time homebuyers. There are reports that banks are asking for higher credit scores, with a report of a bank rejecting a score of as high as 800. It also appears that self-employment can be a problem in obtaining a mortgage. The mortgage application process continues to be deemed as too drawn out to the point of thwarting or jeopardizing the sale. There is also lack of assistance for helping current homeowners who are slightly delinquent to modify keep their homes.

• “Banks are ignoring settlement dates and can't even give you a reason for a delay. There is no accountability on their end of the transaction. Three settlements in October were delayed due to lender issues.”
• “1st time buyers finding it difficult to qualify for loans”
• “I had two buyers with over 800 credit score and the bank would not loan. They ended up paying cash and looking for a loan after the closing.”
• “The lack of assistance from the mortgage companies for helping current home owners modifying their loan due to being underwater or slight delinquency to help them stay in their homes!!!!”
• “Cash buyers are winning bids. FHA buyers hardly have a chance.”
• "Concerned about purchases by investor groups - hundreds of homes purchased from Fannie/Freddie - basically no information forthcoming regarding this - concerned about what effect this will have long term in our area - are we going to have no "real" home owners for years to come? Not a good plan - list with realtors, to be purchased by home owner.”