LENDING IN HAWAII IS GETTING SPOOKY… I recently attended the Hawaii Association of Realtors Annual Conference. Hot topics of discussion were Lenders and conditions now being put on loans. With interest rates being phenomenal we are still running into road blocks to get the housing market on solid ground. We are seeing everything from get your mom of the credit card to insurance companies ordering repairs. It used to be when you had a final loan approval it had maybe 5 conditions and those were generally in house. Those conditions could generally be cleared within days. Now it isn’t uncommon to see over 20 conditions. Another issue was that at least in Hawaii lenders don’t seem to feel that they have to honor the Purchase Contract for timelines. We have buyers with all documentation in early on and still routinely delay closings by up to 2 weeks due to underwriting making new conditions as the loan progresses. We also are seeing well qualified buyers making in excess of 200k per year not being qualified for small loans due to being sole business owners and having tax write off issues.
Those issues in the past didn’t seem to be major but now it is like navigating through the dark forest. I’m not trying to say all loans or lenders have issues, but it was a recurring theme amongst the Realtors at the conference. Discussion also centered on government in Washington and making sure we are all pro-active to encourage the continuation of the mortgage interest deduction, and to encourage the tax waiver for short sale home owner occupants. Just these two issues alone and getting the lenders to get more lending going were very much top of mind. My advice to any Realtor or buyer for Hawaii Real Estate is to get buyers approved up front prior to beginning your home search, have the expectation that the lenders will ask for some unusual things and be prepared to provide them, and be very flexible with your timeline for closing on a property here.
Aloha, Gina Duncan