NO PLANS TO REWRITE THE AMERICAN DREAM

By
Mortgage and Lending with Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 NMLS # 6869

“No Plans to Rewrite the American Dream”

Prior to my mortgage broker career, which started in 1979, I was a Realtor. A company I started in 1970, that I sold in 1985. At the time 100 agents and 5 offices. At the time I did an ESOP and sold to 13 of my agents.

There have been a boat load of changes, more to do with regulations and technology. I can tell you that, not much has really changed, when it comes to the attitude of the homeowner or homeowner, want-to-be’s.

There is no shortage of home buyersWe have gone through high teens for interest rates. There were no shortage of home buyers. In spite of the interest rates, buyers were plentiful. I remember once saying, “If rates dropped down to 12%, I could refinance the whole world.” Remember, at the time, no credit scoring or restrictive regulations, as we have today. Oh, and less defaults.

There are no shortage of home buyer want-to-be’s today. There are a number of reasons, they are not buying.

The first is fear. Newspapers, ratio and internet talking about how bad things are or at least have been. I do preapprovals for these folks all the time and I ask them why they are waiting, inevitably they answer, fear.

The second is credit scores and regulations/restrictions, after short sales and bankruptcies. This is such a huge group of people, that desperately want to buy a home.

Let me know your thoughts.

Buy, Sell or Rent: Americans Rewrite the Dream

By: CNBC

 

American homes have never been more affordable than they are today. Prices are down dramatically, mortgage rates are at record lows and desperate sellers are willing to make concessions.

Still about one third of Americans choose to rent, despite the fact that 85 percent say owning makes more sense financially than renting over the long term, according to a new Fannie Mae study.

Buying is cheaper than renting in most U.S. markets, according to another study from online real estate sale site Zillow. The upfront costs may be higher, but Zillow looked at what it calls the “breakeven horizon,” which is when the cost of owning (including down payment, taxes, fees) meets the cost of renting. While markets will vary neighborhood to neighborhood, the breakeven point in many markets, like Minneapolis, Baltimore, Denver, St. Louis, Chicago and Charlotte, is under three years.

The main barrier to homeownership for many, however, is the mortgage market.

The days of free-wheeling lending are over, and credit worthiness is now king. There are low down payment options, like the FHA, but too many potential buyers don’t meet the credit qualifications either for the great low rates or for the loan itself.

The other half of the equation is attitudes.

image: Sujin Jetkasettakorn/freedigitalphotos.net

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Joe Petrowsky, NMLS #6869

Right Trac Financial Group, Inc. NMLS #2709

110 Main St.

Manchester, Ct. 06042

Office: 860 647-7701 x116

Fax: 860 647-8940

Cell: 860 836-9294

Email: joe@righttracfg.com

www.righttracfg.com

www.joepetrowsky.com

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Joe Petrowsky does not guarantee nor is in any way responsible for the accuracy of the information provided herein, and provides said information without warranties of any kind, either expressed or implied.

Equal Housing Statement: We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. We encourage and support an affirmative advertising and marketing program in which there are no barriers to obtaining housing becuase of race, color, religion, sex, handicap, familial status, or national origin.

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Debbie Reynolds
Prudential PenFed Realty, "The Real Debbie Reynolds" Your Clarksville Real Estate Professional, 931-920-6730 - Clarksville, TN
Your Dedicated Clarksville TN Real Estate Agent

Joe, I have had a rash of willing buyers lately that just can't qualify because of low credit scores. It wil take months to get those scores to rise and then the rates wil probably rise with them.

Aug 09, 2012 06:11 AM #1
Rainmaker
608,371
Patricia Feager, MBA, GRI, Cert Negotiations Expert, Military Relo Prof
Keller Williams Realty - Flower Mound, TX
The Little REALTOR® That Could

Joe,

I love the fact that you have a prior Real Estate background and you're a Mortgage Broker today. In addition, you have years of experience so you know exactly what you're talking about. I can relate to this post because my first home was purchased in July 1979 - VA loan, 10.5% interest. That property closed on the last day of the month - then interest rates soared and I was so glad I locked in at 10.5%. 

What I remember the most about that day of closing was receiving a brochure about what it meant to have a VA loan. I couldn't leave the table until I read the whole thing - Lawyers orders and he sat there watching me and my husband read the brochure. The lawyers parting words were, your house can be taken away if you don't pay and you have to maintain and take care of it - you may have signed papers, but it's not yours until it's paid in full

Joe you always have excellent advice to give your blog followers. Your one of my favorite bloggers because you tell it like it is and you tell the truth. You took me down memory lane - what a GREAT post!

Thank you.

Aug 09, 2012 07:42 AM #2
Rainmaker
409,895
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

Joe, 

We lease and manage higher end rentals in the heart of Atlanta.  We are seeing a big rise in folks CHOOSING to rent who could easily afford to buy.  Our average credit score is 784!  Most have money in the bank and make great salaries.  We do not have any that have had foreclosures or short sales on previous homes.  Very interesting dynamic. 

All the best, Michelle

Aug 09, 2012 08:35 AM #3
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Joe Petrowsky

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