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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Pogeu Mahone who wrote (100110)	1/14/2008 3:25:31 PM
From: John Koligman	Read Replies (2) \| Respond to of 306849

Apologies if this has already been posted, but it is a new 'wrinkle' in the real estate market that I have never seen an article about, even in past downturns. Perhaps I just missed them... John Declining’ label ups down payments for some home buyers Misty Williams, Tribune Closing the deal on a house just got more complicated. Lenders have labeled much of the Valley as a “declining market” — forcing home buyers wanting to purchase in certain areas to fork over another 5 percent in down-payment cash. Real estate professionals say the new loan restrictions could further shrink the buyer pool for home sellers, already facing stiff competition in an oversaturated market. “It’s probably been 12 or 15 years since we’ve really been affected by this,” said Chris Mozilo, area sales manager with Countrywide Home Loans in Phoenix. Most of Maricopa and Pinal counties have been affected, though lenders and appraisers look at specific ZIP codes to try and narrow it down, Mozilo said. It’s also happening in Florida, Southern California and metropolitan areas across the country. Mortgage giants Fannie Mae and Freddie Mac have both instituted the requirement, as home values continue to slide and mortgage companies tighten standards. Lenders are worried that if prices drop further, loans may exceed what properties are worth, Mozilo said. But many homeowners are already upside down in their home loans, facing dramatically higher payments as adjustable interest rates tick upward. It’s like “shutting the barn door after the horse is already out,” Mozilo said. The new constraints have caused deals to fall through, Valley real estate agent Travis Schnepp said. “It’s making it harder for the average person to purchase right now,” Schnepp said.