Last week, we had the pleasure of hosting several area realtors and other industry professionals for an e-Forum on Market Conditions. Doing business in these unprecedented times has mandated a lot of changes in how our business is done and has left many with questions. Hosting this event allowed us to answer a lot of these questions. It was such a success that we plan to have more in the future so be on the lookout for the next one. But for now, I wanted to send out a quick recap of the topics discussed.
One of the overarching themes of the discussion was that a “one size fits all” rule does not exist when it comes to guidelines for loan programs. Don’t get me wrong, the minimum requirements are established by a combination of government entities and what the market requires. However, it is possible that one lender’s requirements will be different from another lenders. Recently, we have seen this to be the case.
As a result of the current pandemic, one lender raised their minimum credit score on FHA loans to 700. However, at Stockton Mortgage we were and are offering FHA loans with a minimum credit score of 620. (Of course, there are other qualifications other than credit for both lenders to approve someone for a mortgage.) So, one lender might say, “this product requires a minimum credit score of 700,” and be telling the truth; it is not the truth for all lenders.
Additionally, there was a lot of discussion on how business is being done. We, as a society, are trying to distance ourselves from others. This has affected two key areas of the mortgage approval process: the first being appraisals. While all programs still require appraisals to be done, how they are being done is varied. Most loan programs do not require a full indoor/outdoor appraisal be conducted as they once had. Instead, some programs allow for a drive by appraisal and others require the seller take photographs of the interior of the home. For the specifics on these requirements, contact your local Stockton Mortgage representative.
Another key factor that was affected is the verification of employment (VOE). Many companies have sent their employees home while others have temporarily shut down operations so being able to verify that a borrower is still working and will be working in the future has become more difficult than in the past. There are often multiple VOEs conducted through out the processing of a single loan to ensure that the borrower has been able to continue working.
Many lenders, like Stockton Mortgage, and other industry professionals have been able to adjust to these new challenges through implementing new procedures and policies. To get the details on these adjustments, ask your Stockton Mortgage representative or plan to join our next e-Forum where we can address your questions about our current and future market.