The era of qualified mortgages has arrived, and Strand bankers and real estate officials don’t think it will put a dent in the pace of area real estate sales.
“The longer it goes, the easier it’s going to get for the consumer,” said Mark Branstrom, president of the Retail Mortgage Group for CresCom Bank.
A qualified mortgage is a term born of the burst of the housing bubble and the stock market tumble that followed. The federal government determined that too many banks had been making questionable house loans, bundling them and selling them to other institutions. When those institutions learned that all they had was a pile of worthless paper, chaos ensued.
Eventually, Congress passed the Dodd-Frank Bill, which among other things defined the information banks needed to know from people getting mortgage loans in order to write qualified mortgages, named because banks had determined the borrower could repay the loan.
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All home loan borrowers now will have to produce back W-2 forms, recent pay stubs and statements from credit card companies, for instance. Then all that information will have to be checked before a loan can be granted.
That’s the same kind of information many people had to give before the bust, and those who didn’t may not have survived the fallout as homeowners.
Branstrom said CresCom has been using the new rules for a couple of years now, and that young mortgage bankers weren’t accustomed to all the new rules because they’d gotten into the business after bank deregulation. Before deregulation, those things required by the new rules were commonplace.
Branstrom said they now have become so smooth with the new Dodd-Frank regulations that it has cut the time from origination to closing. He said it took 30 days to 45 days to close a mortgage during the learning curve, a span that has been cut to less than 30 now.
Branstrom said the keys to processing qualified mortgages smoothly are communication and developing sources that are needed for things to go as quickly as they can.
Banks can still write loans that aren’t qualified, Branstrom said. But the downside is that the banks will have to buy back those loans if the borrower fails to make payments.
That’s a risk few, if any banks want to take.
The Myrtle Beach area has been named the third best small metro area in the U.S. for buying a home, according to NerdWallet, a free online financial advice company.
NerdWallet looked at homeownership rates, median household income, monthly homeowner costs and population growth to rank best places for home ownership in small, medium and large metro areas.
Huntsville, Ala., and Fort Wayne, Ind., ranked one and two in the small metro market.
NerdWallet said the Myrtle Beach-North Myrtle Beach-Conway area “is one of the fastest growing small metro areas on our list with a population growth of 2.2 percent. The area’s high rate of homeownership and affordable housing make it a great place to settle down.”
The company’s information showed the Myrtle Beach area with a 68.7 percent homeownership rate and median homeownership costs of $1,242 a month. Homeowner costs are slightly above one-third of household income.
No other South Carolina area was on the small metro list. Wilmington, N.C., ranked 10th.
In the medium-sized metro ranking, Columbia came in at No. 5, Charleston No. 8 and Greenville No. 10.
Raleigh and Charlotte, N.C., were first and second, respectively, in the large metro ranking.
C. Mark Hardee and Brandon L. Brookshire, with 30 years combined in the Grand Strand real estate market, have formed Carolina Strand Realty. Hardee and Brookshire have closed more than 1,000 transactions of all sizes and received a number of awards for their work in the mid-1990’s, according to information from Newswire.net.
The new firm will open its office in The Market Common in March.
The firm has alliances with architects, engineers and interior designers to help clients looking for those services.
“Carolina Strand Realty will be involved in all aspects of the market, including development, commercial and residential,” Brookshire said.