Lenders Say Home Buyers Still Have Options During Credit Crunch
WHEDA Temporarily Halting New Mortgages
Updated: 8:15 pm CDT October 3, 2008
MADISON, Wis. -- A Wisconsin agency offering affordable housing has temporarily stopping issuing mortgages because it is having trouble raising money to make the loans, but local lenders said there are other ways to get a home right now.
VIDEO: Watch The ReportThe Wisconsin Housing and Economic Development Agency announced Thursday that it was temporarily going to stop issuing new mortgages, and some lenders called the situation with WHEDA unprecedented and troubling because it is such a good program, WISC-TV reported.But, those same lenders said there are other ways to get a home during the current credit crunch.Mortgage lenders like Christine Haroldson admit credit standards have tightened, but despite WHEDA loans not being available, she said there are other programs that can fit the same home buyers - - with still as little as 3 percent down or less, WISC-TV reported."You can still get 100 percent financing; you just have to have good credit to do it and maybe a little bit better than you had to have six months or a year ago," said Haroldson, director of mortgage operations for Great Wisconsin Credit Union.Dan Leeder, vice president of mortgage lending for Park Bank, said it helps that Madison's real estate prices didn't inflate as much as other cities around the country, but he expects lending has now returned to more responsible times."Folks are concerned with the financial markets and everything that's been going on, but we keep reassuring them here at Park Bank we're going to take care of them," said Leeder. "We have no issues with funding, the money is readily available, and there just have been no real changes with us here."Said Haroldson, "I think we're going to see this hard for a year, and I think what's especially hard is the lenders who weren't in this 20 years ago with the rest of us, they don't know how to look at loans in the way we used to -- we're just back to standard underwriting."The lenders said the federal FHA program might be a good option for first-time homebuyers who can't afford a down payment; otherwise they likely have programs with a small down payment, just with higher rates than WHEDA traditionally offered.
VIDEO: Watch The ReportThe Wisconsin Housing and Economic Development Agency announced Thursday that it was temporarily going to stop issuing new mortgages, and some lenders called the situation with WHEDA unprecedented and troubling because it is such a good program, WISC-TV reported.But, those same lenders said there are other ways to get a home during the current credit crunch.Mortgage lenders like Christine Haroldson admit credit standards have tightened, but despite WHEDA loans not being available, she said there are other programs that can fit the same home buyers - - with still as little as 3 percent down or less, WISC-TV reported."You can still get 100 percent financing; you just have to have good credit to do it and maybe a little bit better than you had to have six months or a year ago," said Haroldson, director of mortgage operations for Great Wisconsin Credit Union.Dan Leeder, vice president of mortgage lending for Park Bank, said it helps that Madison's real estate prices didn't inflate as much as other cities around the country, but he expects lending has now returned to more responsible times."Folks are concerned with the financial markets and everything that's been going on, but we keep reassuring them here at Park Bank we're going to take care of them," said Leeder. "We have no issues with funding, the money is readily available, and there just have been no real changes with us here."Said Haroldson, "I think we're going to see this hard for a year, and I think what's especially hard is the lenders who weren't in this 20 years ago with the rest of us, they don't know how to look at loans in the way we used to -- we're just back to standard underwriting."The lenders said the federal FHA program might be a good option for first-time homebuyers who can't afford a down payment; otherwise they likely have programs with a small down payment, just with higher rates than WHEDA traditionally offered.
Related Story:
- October 2, 2008: Affordable-Housing Lending Agency To Halt Issuing Mortgages
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