Louisville mortgages get tougher

[Roland99]

Louisville mortgages get tougher
http://www.courier-journal.com/apps/pbcs.dll/article?AID=/20070813/BUSINESS/70813025

Even in the last seven to 10 days, mortgage brokers and bankers say lending standards have tightened dramatically, making it more difficult for those with low credit scores to buy a new home or take out an equity loan on their current home.

“We’re getting emails from lenders on a regular basis who are threatening to go out of business or slashing programs,” said Jim Heleringer, president and owner of Heleringer Mortgage Co. in the Highlands.

Secondary mortgages, which often are used for home-equity loans, have been particularly hard hit in the last 10 days, Heleringer said. More applicants are being turn down, he said, and even those who qualify are seeing interest rates rise to as high as 11 percent from 8.75 percent a week or two ago.

Steve Adams, a loan officer with 1st Independence Mortgage, said buyers with low credit scores, a lack of savings or large amounts of debt are increasingly being rejected for loans. Adams predicted that the changes will result in fewer loan packages for the most expensive homes in Louisville, because not as many people will have the income or savings to qualify for those properties. The lower end of the market will be hit as well, he said, because renters won’t be able to find loans with no down payment or low introductory rates.

I was checking some prices on homes in the Nortons Commons development. $499,000 for a 2,400 sq. ft. home?!?!?! WTF?!!? I don't care if the faucets are 24k gold...half a mil for only 2,400 sq. ft.???