What is the state of lending these days? Does anyone really know? I speak with lenders all the time and I seem to get a different answer or different points of view with each one of them. It’s not that I think they don’t know the answer, but I honestly believe that they are just as confused as I am. The rules and regulations are changing daily and as a result, I don’t think anyone knows what direction we are going in, let alone for the better.
I hear stories about processes and systems that are being overhauled in every lending house. I hear stories on how those new systems aren’t working or at the very least, delaying the lending process by weeks and months. I hear about complicated checks, re-checks, and lack of anyone being able to make a decision. I hear about the changes in the appraisal system that has everyone from lenders to realtors afraid of picking up a phone and daring to speak with an appraiser. The pendulum has clearly swung in the other direction. The word “overcautious” is probably not strong enough an adjective to describe everyone’s posture at present time.
Now don’t get me wrong. I know changing in lending needed to be made and if we can get through this difficult period, things “may” and I emphasize “may” be for the better, but for right now, it’s a disaster. When I talk with people about how and when things will get better, all they can tell me is their fall back answer which is, “Hey, at least we are getting some deals done!”
Yes, that’s correct. We are getting some deals done, but if we are going to have a significant recovery, we need to get a lot more deals done and in a timely fashion. A standard 30-day close is almost ready to be put on the shelf as an extinct process in lending and very little loosening in the credit markets has happened overall. In the meantime, plan accordingly for more bumps in the road, more paperwork, more changing rules, and more delays if you need a loan.
Dan Polimino is a Realtor with Fuller Sotheby’s International Realty. He can be reached at DPolimino@fullerproperties.com and www.CoDreamHouse.com
