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Not So Random Observations

There are some things happening in my office, on my phone and in my e-mails that might just be haphazard glimpses into unrelated instances.  However, my instincts tell me they could once again be the beginning of ground-level trends that will soon catch the “experts” unaware.

  • The latest wave of  “can you help me?” calls are not primarily from people that would be loosely categorized as “sub-prime” anymore.  I’ve either helped them, or been unable to, and they’ve moved on.  Now the people behind are ones with formerly better-than-decent credit, good jobs, and 20% or more money to put down (or a great deal of equity in their homes).  The people who are seeking my help now are in considerable trouble.
  • No mortgage commitments are granted in 30 days and it is a rare one that comes through in 45.  They are all at least 60 and often 90 days from application to commitment. That is, unless they are denied.
  • Many mortgage applications are in fact being denied, and while the reasons vary, they say as much about the lenders as they do about the borrowers.  Appraisals don’t measure up; buyers’ job prospects are shaky or hours cut back; lenders’ programs are eliminated, scaled back, or guidelines toughened.
  • Underwater sellers are not being permitted to exit their mortgage obligations via “short sales”, though the federal pressure on the lenders to permit such departures is enormous.  The files get referred to reviewers or examiners or janitors for all I know, and then take so long to re-emerge that the buyers have lost interest, seen their mortgage commitments expire, or been denied mortgages (see above).
  • Some buyers want way beyond is reasonable, and a lot of my colleagues are not acting as counselors.  If you get a really, really low price on a house, chances are great that the sellers won’t also upgrade and improve.  So why is the response to a seller’s “no” from these attorneys invariably “hey, it’s a buyers’ market--I’ll tell them to move on?”  There’s no more negotiation, as I wrote the other day, and a majority of the buyers are like three year olds who throw hissy fits. 
  • Some attorneys and real estate agents are seemingly screwing up transactions deliberately so they, or their investor friends, can get the best deals.  The anecdotal evidence is mounting.
  • The inquiries for bankruptcy referrals or credit counselors have increased.  I can’t give you the percentage, but it is a whoppingly large escalation.
There’s a definite pattern emerging:  it is just about to come into focus.

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