One in three consumers would consider a Columbia SC mortgage from retailer Wal-Mart and almost half would consider one from online payment provider PayPal, according to a financial services study released recently.
The results should be especially disconcerting for banks because the two companies don’t even offer mortgages.
Would You Get A Columbia SC Mortgage at Wal-Mart?
The study shows consumers are willing to try alternative lenders as borrowers focus on price, customer service and trust in their provider when selecting a mortgage, said Doug Hautop, lending practice lead at the Carlisle & Gallagher Consulting Group, which conducted the survey.
A Wal-Mart spokeswoman declined to comment on the survey. The retailer provides small business loans at its Sam’s Club stores, but doesn’t offer mortgages (Yet).
While the Carlisle & Gallagher survey found that 80 percent of consumers would consider a Columbia SC mortgage from a non-bank, there was a bright spot for traditional banks. Seventy percent of respondents said they would prefer to have their mortgage with one of their main banks, although only 39 percent currently do so.
Two-thirds of respondents said the high cost of getting a loan was the most painful aspect of the mortgage application process, followed by slow execution (56 percent) and poor communication with the lender (32 percent).
In the past year banks have benefited from surging consumer demand to refinance their mortgages at low interest rates. But in the coming year, refinancings are forecast to decline, so banks will need to focus more on serving customers taking out loans to purchase homes.
We’d love to know YOUR opinion. Would you consider getting your Columbia SC mortgage from a non-bank like Wal-Mart or Pay Pal? Tell us what you think by using our comment form.
Backlogs in foreclosure processing are causing delays in home-price improvement and could wind up affecting the cost of a mortgage, thereby hurting Columbia SC home buyers wanting to get a mortgage.
As unpleasant as it is for everyone involved, when a borrower can’t — or decides not to — make payments, the more quickly you can move the property back into the inventory and get a new homeowner in it, the better it is for the community.
How the Slow Process Affects Columbia SC Home Buyers
Even if you’re not in foreclosure, if you live where processing times are long, that could eventually end up affecting you when you’re in the market for a new mortgage.
If you’re in a home not making payments for a long time, your taxes, insurance and interest payments may be building up. Suddenly, you owe $100,000 more than you owed in the first place, and you would likely have a hard time becoming current.
Freddie Mac and Fannie Mae are considering state-to-state pricing on mortgages because of long processing times. In states where there are long turnaround times, Freddie and Fannie would calculate the cost of foreclosing on properties and how long it would take. The costs could be built into the mortgage rate you’d get in those states.
High foreclosure inventory volume also affects home prices. Prices are rising faster in places where the foreclosure process isn’t so delayed.
Nationwide, the average time for homes to spend in the foreclosure process is 382 days. That may not seem so long, but it’s actually an extended stretch compared with the average of 336 days in the third quarter of last year — and only 140 days in the third quarter of 2007.
Columbia SC home buyers need not be discouraged. There are still lenders who are ready to focus on your mortgage application, and prices may never be this low again. Contact us today to schedule a no-obligation consultation on the current real estate market in the Columbia SC area.
A Columbia SC home mortgage is still too hard to get, according to Federal Reserve Chairman Ben Bernanke. The Fed Chair discussed housing and mortgage finance at the Hope Global Financial Dignity Summit in Atlanta.
The Columbia SC housing market has been experiencing signs of recovery this year, but according to Bernanke, it’s far from out of the woods. Weak construction numbers remain a drag and “7% of mortgages are either more than 90 days overdue or in the process of foreclosure,” he added.
The Fed chief also pointed to tighter lending conditions for a home mortgage as a factor in the housing slowdown.
Columbia SC Home Mortgage Tightening Has Gone Too Far
“Lenders began tightening home mortgage credit standards in 2007 and have not significantly eased standards since,” the chairman said, citing the Federal Reserve’s Senior Loan Officer Opinion Survey on Bank Lending Practices. “Terms and standards have tightened most for borrowers with lower credit scores and with less money available for a down payment.”
Bernanke said some tightening was warranted after the housing crisis, but added “it seems at this point the pendulum has swung too far the other way, and that overly tight lending standards may now be preventing creditworthy borrowers from buying homes.”
Bernanke’s statements showed a Fed Chairman who is well aware of the push-pull that is creating conflict in the home mortgage market.
On one hand, federal regulators and new laws are trying to prevent unnecessary foreclosures and ensure a stable housing market. On the other hand, Bernanke realizes lending institutions are delaying the origination of certain loans because they fear new regulations and potential putback claims associated with today’s new regulatory landscape.
To a larger degree, the Fed chairman blames the slow housing recovery on unemployment issues since a loss of income generally forces citizens to avoid homeownership altogether.
Underwater borrowers also remain trapped, making it difficult for them to stimulate new market activity.
“The fall in home prices means that many current homeowners cannot rely as much as they could in the past on tapping their existing home equity to trade up to larger or better homes, while underwater homeowners may be financially unable to move from their current homes,” Bernanke said.
For more on Columbia SC home mortgage information, click the Columbia SC Mortgage Info category to the right.
More Columbia SC homebuyers should be able to qualify for a mortgage without the increasing risk to lenders that caused the big credit crunch. All of this should come about through more sophisticated credit risk scoring that uses alternative data, such as unsecured credit and property history in consumer credit report analysis.
Traditional credit data and analytics continue to be relevant, but are not sufficient to satisfy the consumer credit reformation of today. As a result of the changes in consumer behavior, lenders cannot revert back to their prior mortgage underwriting policies. Too much damage has already been done to the market, consumers, shareholders and investors.
Consumers used to pay mortgage debts first, but because of the recent financial crisis some consumers now treat paying other debts, such as credit card bills and car payments, as a higher priority to maintain personal financial liquidity.
Why More Columbia SC Homebuyers May Qualify
According to a new report by the CEB TowerGroup, data from a joint analysis conducted by CoreLogic and FICO that compares the FICO® Score used by most lenders today with a new score launched in July was evaluated. The traditional credit data from national credit data repositories and the unique alternative credit data contained in the recently launched CoreScoreTM credit report shows the analysis of 300,000 mortgage applications found that 3,100 more applicants would receive a qualifying credit score of 700 and approximately 70 percent of a sample population saw their credit score improve.
The new FICO/Corelogic score is more accurate than the prior FICO® Score in identifying the riskiest loans improving lenders ability to discern consumer credit risk at origination. For applicants identified as the riskiest 10 percent of the lending population (those most likely to become past due on their mortgage loan), it identified 10 percent more seriously delinquent mortgage loans – loans 90 days or more past due.
This new credit risk scoring should help more Columbia SC homebuyers qualify for a mortgage than with the old scoring system. Alternative credit information can support Columbia SC homebuyers with newly established credit files with good credit, those with minimal information in their traditional credit files but with good alternative credit payment histories, and long-time renters with no serious payment issues.
Columbia SC home sales 
are being stymied somewhat by low appraisal valuations, and this is the case just about everywhere in the country, not just in the Columbia SC area.
According to the results of a survey just released by the National Association of REALTORS® (NAR), “A sizable share of real estate appraisals are holding back home sales.” NAR says “most appraisers are competent” but that the process is the issue, that appraisals generally lag market conditions and changes in the appraisal process including using out of town appraisers, are the culprit.
NAR surveyed it’s members on the topic and reports that 65 percent of them reported having no contract problems as a result of appraisal issues over the past 3 months, 11 percent said a low appraisal killed a deal, 9 percent said a low appraisal delayed a deal and 15 percent said a low appraisal caused a contract to be renegotiated to a lower price. NAR says Major problems reported by Realtors® include:
- Some appraisers are using foreclosures, short sales and run-down properties as comparable homes, and are not making adjustments for market conditions or the condition of the property.
- Appraised values that do not reflect market conditions such as rising prices, the presence of multi-bidding and low inventory.
- Appraised values are very inconsistent and fluctuate widely.
- Out-of-town appraisers, who are not familiar with Columbia SC home sales or local market conditions, are being used.
- Turn-around time by both appraisers and banks is slow, which delays closings.
NAR went on to say they have been advocates for an independent appraisal process as well as increased education requirements to allow appraisers to produce the most accurate reports possible. However, NAR reports that appraisers have faced undue pressure — whether from a lender or an AMC — to complete appraisals using distressed sales as comps, to complete an appraisal in an unacceptably short time frame, and to complete a scope of work that is not justified by the fee being offered.
If you happen to be one of the rare buyers trying to get a “green home” appraised… good luck. Most appraisers are not trained in green homes, and many lenders are kicking them back as well.
Columbia SC home sales continue to show that real estate is coming back. Let’s just hope low appraisal valuations don’t put the brakes on an already sensitive market.