Mortgages are at an All Time Low

SUSIE GHARIB: One thing that could help the housing market — low mortgage
rates. For the second week in a row, the 30-year fixed remained at an all-
time record low. It’s stuck at 3.87 percent. That compares to 5.05 percent
a year ago. Still, even with mortgages enticingly low, getting a loan these
days can be a big headache. Suzanne Pratt takes a look at one woman’s quest
for home, sweet home.

is happy, having just purchased this two-bedroom condo in Cliffside Park,
New Jersey. But her path to property ownership was bumpy. Two years ago,
she had wanted to buy a different place, but went through hoops when trying
to get a loan from a large bank.

DR. FARNAZ SAFI, HOMEOWNER: It took about five to six months.
Finally, they said, no, we really can’t get the mortgage. You’ll need this
additional information, that additional piece of information. We’ll need at
least another two to three months. Quite honestly, I didn’t have that
time, so I pretty much pulled out.

PRATT: After taking a break from her search, Safi tried again —
this time, with a smaller bank.

SAFI: From the time that I put an offer in to the closing date was 26
days. They approved the mortgage in nine days.

PRATT: North Jersey Community Bank gave Safi that mortgage and a
better experience. But she is in the minority. Many Americans, no matter
where they go for a home loan, now find they need a bigger down payment,
piles of paperwork, and oodles of patience. To be clear, it’s not that
smaller banks have looser requirements, but they are, at least in some
cases, more nimble. North Jersey Community Bank CEO Frank Sorrentino says
his bank never offered easy money, even during the housing boom.

in existence, our credit standards have pretty much been the same. We have
this funny policy — we like to lend money to people who can actually pay
us back.

PRATT: The big unknown is what the more stringent loan process will
do to the U.S. housing market. Some say the pendulum has moved too far in
the wrong direction, making it too difficult for people to borrow and too
hard for the housing recovery to build a foundation.

SORRENTINO: I think having this — going from so loose policy to so
tight policy is not a good thing and there are people who can actually
afford to buy a home and move on.

PRATT: Housing expert Andrew Barrocas disagrees. He says lending
standards got too loose and now, they’re just right.

ANDREW BARROCAS, CEO, MNS: They are a lot more stringent than where
they were, but they’re right about at norm of where they should be in order
for banks to take the risk.

PRATT: As for Safi’s new place, she moved in two weeks ago. And
already, it’s home.

SAFI: I love it. I do!

PRATT: Suzanne Pratt, NIGHTLY BUSINESS REPORT, Cliffside Park, New

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