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“Yet, Even More Bad News For Home Builders…”
By Sherman Ragland | September 10, 2007
WASHINGTON, DC – One-third of broker-originated purchase money closings were canceled last month, as lenders shied away from riskier borrowers, a new survey says.
The survey of 1,700 mortgage brokers conducted by Campbell Communications comes as numerous lenders that catered to subprime and Alt-A borrowers shuttered up operations.
Thomas Popik, who designed the survey, said three years ago a survey of real estate agents found that only 4 percent of transactions failed to close on average, according to published reports from the Associated Press.
Additionally, the survey found 57 percent of adjustable-rate borrowers with resetting interest rates that were working with a mortgage broker were unable to refinance. Brokers also reported that one-in-five subprime funding commitments were not met by wholesalers.
It’s painful right now for the large homebuilders and only going to get worse as more and more capital sources dry up for new home construction.
Look for housing prices to dip, temporarily, and then a huge spike upwards in about 18-24 months, pending the forecast for the general economy.
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Tags: homebuilders, mortgage brokers, new home construction, real estate agents, sherman ragland, spike, subprime, upwards
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