Will Bank Lending Standards Loosen in 2013?

 Getting a bank loan these days requires a lot of time and patience. Thirty to ninety day funding windows are the norm, so if you have a need for speed you may be out of luck. As home prices continue to rise, and interest rates remain historically low, many people wonder if banks will loosen their stringent lending standards in 2013.

The answer is no. Mortgage underwriting standards are largely dictated by Freddie, Fannie, and the FHA. Not only is every file scrutinized on the front end, but auditors on the back end are looking for any error or non-compliance item to use to fine you or even put you behind bars. Most mortgage brokerages can tell you that they receive at least one notice per day from the NMLS about a new regulatory or compliance item. Many mortgage brokers say they may need to hire an attorney to be in-house in order to comply with so many new requirements.

If you need a loan quickly, you may opt for private money as an alternative. Private money and hard money lenders can underwrite and fund loans quickly to allow you to take advantage of opportunties that may not be around long enough for a bank approval. Be prepared for even more stringent bank underwriting requirements in coming years, as banks will have to comply with international bank standards imposed by the Basel III. These new requirements may even threaten to put local and community banks out of business. Read more about that here: http://www.trulia.com/blog/coreycurwick/2012/11/new_banking_standards_may_put_community_banks_out_of_business

To learn more about our private money loans for your real estate purchases and refinances, click here: http://privatemoneyutah.com/loan-programs/

Posted by Corey Curwick Dutton on November 12, 2012