CREDIT SCORES TAKE CENTER STAGE

As a realtor, lenders have always been my friends, but many are now infuriating. With much of the blame for the housing crisis being laid at the feet of the lenders, they are in heightened defense mode. In reality nothing much has changed --- rates are about the same "mas o menos" 6%, buyers with good credit can get loans, appraisers are following their independent process to establish value --- but buyers are scared off and lenders will hang up a closing in that dark pit called Underwriting for days with no compunctions. Sure there were a few bad lenders giving credit or too much credit to marginal buyers. For myself, I will not accept offers on my listings from the marginal brokers, but then I always did that. Buyers who are marginal in their credit history, I send to lenders who will coach them to a good score before I take them out to look at houses. Disappointing for them? Yes. Realistic and professional? Yes. Not all realtors did that so they share blame for this crisis too. Now is a good time to buy, but not for everyone.
Credit scores have become almost an obsession with buyers so here are some interesting aspects. The LA Times (yes, I still read it but am over any other addiction I once had with Los Angeles except perhaps for the Lakers and good jazz!) had an article missed by our local news on the largest-ever class action lawsuit which promises free access to credit data. We will all be able to get our credit scores with no strings attached under a settlement with TransUnion Corp. Good timing, as we all need to take more heed about how we spend our money. I have a full article in my Legacy Outlook Newsletter this month on what makes for a good credit score. Turns out payment history and debt account for two-thirds of the score. Of that, credit card debt matters the most and balances affect the score as much as payment history. Keeping credit balances to 10% of the limit on any card will boost your scores. For the complete article, drop me an email.
So it is a good time to buy or sell, but the unqualified or too aggressive lenders and borrowers will have to jump through higher hurdles now, and that's just fine. It makes the whole real estate market stronger for all of us.