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Loans Harder To Get In Central Texas, Lenders Say
Loans for cars and houses are available to Central Texans, but lenders say the requirements are getting stricter.
Reporter: By Megan FleetwoodEmail Address: megan.fleetwood@kwtx.com |
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(July 11, 2008) - Bankers and mortgage lenders are say Central Texas remains a healthy market for getting loans for houses and cars, but they also say the requirements to qualify for loans are getting stricter and are more widely enforced.
Sherry Craft of Wallik and Volk Mortgage Bankers in Waco, says among the many factors used in the qualification process, credit scores are coming under increasing scrutiny.
"Credit scores are more important than they've ever been before. All pricing, the type of loan you can get, whether or not you can get a loan,” she said.
Craft says that's because regulations in the banking industry across the U.S. are tightening in part because of the scare created by the mortgage crises on the East and West Coasts.
She said the housing market in the Waco area is comparatively stable compared to markets in those areas, but that the awareness created by the issue trickles down to this region.
“They affect us, even though we haven't done anything to cause them to happen," she said.
Lark Smith of Heart O' Texas Federal Credit Union in Waco, says the tightening of rules locally is the result of an effort by lenders to shield themselves from the extreme losses experienced elsewhere in the country because of defaults.
"What financial institutions are probably doing is protecting themselves now from what may be coming in the future," Smith said.
He said the higher requirements when it comes to credit score, debt ratio, collateral, and other factors will affect anyone who wants to borrow money in the near future.
But he says prospective borrowers are the ones with the power to make themselves qualified loan candidates.
"I think instead of being angry at the banking institution, they need to look at the situation and find out how they can correct their situation so they are more palatable to the financial institution,” he said
Pete Cervantez is a Waco resident who’ s struggling with bad credit.
"I can't get credit cards. I can't refinance my house right now,” he said.
Cervantez said he has been disabled ever since 2003 when he fell from a ladder at work, sustaining many injuries including three broken discs.
The right side of his body is now partially paralyzed.
Cervantez says that rising prices and unfortunate circumstances that befall individuals need to be taken into account in the loan application process.
"In the past, I had to file for bankruptcy, because my job went out,” he said.
“And then I got over my head in credit with credit cards and stuff like that. They got me in trouble and I had to file for bankruptcy,” he said.
Smith and Craft agree that the changes being seen in qualification requirements for loan approval do not exempt everyone with any negative listings on their credit reports.
He says it’s a good idea for everyone to get a free credit report once a year.
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Latest Comments
Hey, TEXASLEGAL! You're a genius! (Or psychic.) How did you know? As you were the lone voice in the wilderness on this one, I'll ask you: Will this bailout work or will we be in a depression next year?
Gee who would have thought it? Having to qualify for a loan? Where did that come from? Gosh maybe that concept would have saved all us taxpayers from having to bail out all the unqualified home owners??? Oh but wait folks... when Fannie May and Freddie Mac go belly up the housing market will totally die and we will be in a deep recesssion-depression. Look it up. There is deep trouble coming in that market and when it hits, we the tax payer will be on the hook for trillions (yes trillions) of dollars. And guess who owns most of the securites of Fany and Freddy? China. Congress created Fany and Freddy and have been in charge, and look at the mess. Now they are passing a bill to spend billions more on mortgage bail outs. Gee I really want them to be in charge of my healthcare, but I am sure they could do a better job at healthcare than they have at all the other government instituted programs. Medicare,medicade, social security, welfare etc. pretty scary actually...
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