Home Mortgage Financing – Low Rates but Stricter Underwriting
Although Mortgage interest rates are at historic low levels, qualifying for a mortgage is more difficult than ever.
“The passage of the Dodd-Frank Act that was intended to reduce the ability of bank’s taking excessive risk has instead led to an apparatus that will smother financial institutions in so much red tape that innovation is stifled and America’s economy suffers. Officials are being given the power to regulate more intrusively and to make arbitrary or capricious rulings. The lack of clarity which follows from the sheer complexity of the scheme will sometimes, perhaps often, provide cover for such capriciousness.” (from The Economist)
Ben Bernanke may have trouble getting a loan, but here in South Florida, Rich Campanella of Wells Fargo has “jumbo” financing available (above $417,000 conforming loan level) from 3% for a 5 year adjustable rate to 4% for 30 year fixed rate mortgages.
Although the underwriting process is more difficult than it used to be, loans are getting underwritten, approved and closed.