So much for the tight underwriting standards

Jul 022012

Borrowers complain about the strict underwriting standards, but the standards are just returning to pre-bubble norm. Apparently, even these normals are too “tough”. And remember what happen when borrowers had easy credit.

Fewer banks tighten mortgage underwriting standards

By Jon Prior June 28, 2012 • 3:25pm

Fewer banks tightened underwriting standards, while a slightly more than last year even eased them, according to a survey conducted by the Office of the Comptroller of the Currency.

The agency surveyed 87 of the largest banks, covering 91% of all consumer loans in the U.S. banking system.

Roughly 25% of the banks reported tightened underwriting standards for mortgages, down from 40% last year, according to the survey. Also, 10% of banks eased standards on home loans, an uptick from 8% in 2011.

“Despite the many challenges and uncertainties presented by the housing market, none of the banks exited the residential real estate business during the past year; however, examiners reported that two banks plan to exit the business in the coming year,” the OCC said in the report.

Cypress Overview

Median home price is $364,000. Based on a rental parity value of $495,000, this market is under valued.

Monthly payment affordability has been improving over the last 12 month(s). Momentum suggests improving affordability.

Resale prices on a $/SF basis increased from $246/SF to $248/SF.

Resale prices have been falling for 12 month(s). Price momentum suggests falling prices over the next three months.

Median rental rates increased $8 last month from $2,045 to $2,054.

Rents have been slowly rising for 12 month(s). Price momentum suggests slowly rising rents over the next three months.

Market rating = 5

Proprietary OC Housing News home purchase analysis

5432 NELSON St Cypress, CA 90630

$403,900 …….. Asking Price
$494,185 ………. Purchase Price
4/17/2012 ………. Purchase Date

($90,285) ………. Gross Gain (Loss)
($39,535) ………… Commissions and Costs at 8%
============================================
($129,820) ………. Net Gain (Loss)
============================================
-18.3% ………. Gross Percent Change
-26.3% ………. Net Percent Change
-78.0% ………… Annual Appreciation

Cost of Home Ownership
——————————————————————————
$403,900 …….. Asking Price
$14,137 ………… 3.5% Down FHA Financing
3.80% …………. Mortgage Interest Rate
30 ……………… Number of Years
$389,764 …….. Mortgage
$103,477 ………. Income Requirement

$1,816 ………… Monthly Mortgage Payment
$350 ………… Property Tax at 1.04%
………… Mello Roos & Special Taxes
$101 ………… Homeowners Insurance at 0.3%
$406 ………… Private Mortgage Insurance
………… Homeowners Association Fees
============================================
$2,673 ………. Monthly Cash Outlays

($277) ………. Tax Savings
($582) ………. Equity Hidden in Payment
$18 ………….. Lost Income to Down Payment
$121 ………….. Maintenance and Replacement Reserves
============================================
$1,953 ………. Monthly Cost of Ownership

Cash Acquisition Demands
——————————————————————————
$5,539 ………… Furnishing and Move In at 1% + $1,500
$5,539 ………… Closing Costs at 1% + $1,500
$3,898 ………… Interest Points
$14,137 ………… Down Payment
============================================
$29,112 ………. Total Cash Costs
$29,900 ………. Emergency Cash Reserves
============================================
$59,012 ………. Total Savings Needed
——————————————————————————————————————————————-
This property is available for sale via the MLS.
Please contact Shevy Akason, #01836707
949.769.1599……
sales@ochousingnews.com…..

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