SMARTEN UP ON LENDING

From the National Association of Realtors (NAR) on July 1, 2007:

"CNN: "Looking for Ways Out of the Subprime Mortgage Crisis",
USA Today: "Neighborhood Finds Real Estate Loans Too Good to Be True",
Washington Post: "Foreclosure Rate Hits Historic High""

"Abusive and predatory lending practices are a serious problem for our nation's communities. Because of abuses in the subprime market, families are losing their homes and savings, foreclosure rates are higher, and some neighborhoods face increased vacancy rates. Empty neighborhoods, or those where the majority of houses are for sale, can be perceived as blighted. This leads to declining prices and inevitably devastates the strength and stability of those communities and the families who live there.

How Did This Happen? During the real estate boom, many lenders originated risky mortgages with floating interest rates and weak underwriting standards. While some in the media may have over-dramatized the situation, a number of subprime lenders that made problematic loans have gone out of business, and the delinquency rate for subprime loans at the end of 2006 was more than 13 percent--4.5 percent are in foreclosure."

The solution is education before you begin the lending process. The following from the NAR will provide you the knowledge to avoid these lending disasters:

http://www.realtor.org/subprime_lending.nsf/Pages/responsible_lending_principles?OpenDocument

Start prepared and enjoy the home buying process to the fullest!