Fico 780? 20% down on a $135,000 condo? No dice.

Posted by: Peter Coy on May 18, 2009

Auburn.jpg
The credit crisis is still making lenders ridiculously cautious. Check out this story by Kevin Chiu on the HousingPredictor.com website. A Realtor in Auburn, Ala., home of the mighty Tigers (pictured), said that in early May he had a client buying a $135,000 condo. The client had a 780 FICO score and was ready to put 20% down but couldn’t get financing from a national lender. Solution? “He cashed in a CD for $200,000 and closed on the place.”
That’s not conservative lending. That’s just silly.

Reader Comments

Dr George

May 19, 2009 4:24 PM

Investors tend to flip condos for a quick profit. Perhaps the owner occupancy ratio of this particular condo complex is too low. They are probably trying to ensure flippers to put more down-payment so they can't walk away/foreclose so easily when the value of the condo drops.

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BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.

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