Mortgage brokers see better days ahead
EAGLE COUNTY, Colorado – In the mortgage business, the “new normal” looks a lot like the old normal. The boom years in the middle of the decade were the aberration.
Sarah Jardis, president of Central Rockies Mortgage in Avon, has a couple of nick-knacks on her desk that are reminders of the go-go years – one is a cute little bear given out by Bear Stearns, one of the first big investment banks to close when the national mortgage meltdown hit.
Since then, there are fewer mortgage companies nationally. They’re writing fewer loans, asking for more paperwork and taking longer to close deals.
But mortgage deals are being closed, for both refinance deals and home purchases. And, Jardis said, even first-time buyers are getting into homes, and doing it with little or no money down.
While the Federal Home Administration for all intents won’t finance appreciation-capped condos and townhomes at Miller Ranch and other “affordable” housing enclaves, Jardis said other programs can get buyers into those homes.
One of her current favorites is the “Guaranteed Rural Housing” program from the U.S. Department of Agriculture. That program has been around for a while, Jardis said, but changes in the last couple of years have made it available to buyers in Eagle County. The biggest change, she said, is to program’s income limits, which are now high enough to include local residents.
What about waitresses?
The changes in the federal program are one way the mortgage market is – slowly – starting to put more money into the housing industry. While Jardis said she’s been closing deals steadily even through the slump – a claim echoed by other mortgage brokers interviewed for this story – the fact of the matter is that people who once would have breezed through the process are having a tougher time.
In a valley where the self-employed and those who depend on tips make up a good part of the workforce, mortgages that didn’t require a lot of documentation played a big part in getting people into homes of their own.
Those loans are gone, probably forever, as are the companies that made those loans the backbone of their business.
But, Jardis said, the self-employed and tip-dependent can still buy homes. It just takes a little more work.
“If you’re actually earning the income, it should flow through to your tax returns,” Jardis said. “Like somebody told me, ‘you can either win on your taxes or win on your mortgage.'”
And this is a good time to take on a mortgage.
“With rates and prices as low as they are right now, people need to at least try,” said Wiliam Desportes of Desportes, Selig and Associates.
Trying these days – at least for people who file more complex tax returns – probably includes some quality time with the family accountant, Desportes said.
While there’s still plenty of paperwork to tackle, Desportes, who’s been in the local mortgage business for about a decade, said mortgage underwriters are starting to show a little more flexibility in their standards.
One of the big items, the debt-to-income ratio, is starting to move from about 41 percent to as high as 50 percent in some cases, Desportes said.
Not just first-timers
While money is out there for first-time buyers, Bill Walsh said he’s been doing steady business at the other end of the market. Walsh, a mortgage broker with Alpine Bank in Avon, said he’s been closing deals for $1 million or more all year.
“The criteria have become more detailed,” Walsh said.
But, he added, some of the “gray areas” of the past two years or so are starting to become more clear. And, he added, there are mortgages available for “condo-tel” projects such as the Westin Riverwalk in Avon. Those projects had been tough to finance the past couple of years as lending standards tightened.
But, like most mortgages today, getting to the closing table takes a lot of work.
“I’m talking to you on my cell phone today, but I was in the office working (on Veteran’s Day), when we were closed,” Walsh said.
While mortgage files have gone from thin folders to inch-thick affairs and can take from one to two months to close, the good news is that prospective buyers can get a fairly solid yes or no fairly early in the process, Desportes said.
Still, no one’s saying good times are back.
“The floodgates are not open,” James Wilkins of FirstBank in Vail said. “The local real estate market is still uncertain.”
Desportes agreed that there’s still plenty of “uncertainty and fear” in the market.
“But for folks that can take advantage of the rates and prices, it’s unbelievable.”
Business Editor Scott N. Miller can be reached at 970-748-2930 or email@example.com.
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