The Five Biggest Reasons Marin County Escrows Fall Apart

Reason No. 5: Financing

Two or three years ago, financing was almost never a reason a deal did not come together in Marin County real estate. Lenders were doing 100% financing all over the place, adjustable rate mortgages were getting people into great homes, and everything seemed to work.

Fast forward to 2007. There’s carnage in the sub-prime lending market, the companies that write many of those second mortgages, as many companies have gone under in the last two months. All of those adjustable rate mortgages have come home to roost, and guess what - they adjust, and it’s not downward!

Don’t get me wrong - there is not a lending panic in Marin County, nor are there foreclosures everywhere. In fact, the foreclosure rate is still very low, from what I can see.

What’s changed however, is the climate and the time frame for getting loans. Banks have tightened up everything considerably, and standards have increased. They are also taking much more time to approve loans than they did before, as they are being very careful about the approval process. Combined with a seasonal upswing in business, there’s a real logjam at lenders to get loans approved.

In the last month, I’ve had two separate deals almost fall out because we could not get loans approved in time. Ultimately, everyone waited, but it was nerve wracking for everyone. The crazy part is that the buyers were extremely well qualified, had considerable assets, and were making good down payments.

I don’t have any clients trying 100% financing right now, but I’ve heard from our lending partners it is extremely difficult.

Don’t let your dream home escape you because you didn’t get the loan in time. Be aware that it’s taking a lot longer, standards are higher, and sellers are wary of whom they sell to. Get a good, smart broker who knows this market (we can refer you to several), get pre-approved, and get your ducks in a row before buying!

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