Charting the new lending landscape

By Jennifer Torres

Over more than two decades in the mortgage business, Mark Friend has seen many changes to the lending landscape, especially in recent years as the Central Valley reeled in the wake of the foreclosure crisis.

“We’ve gone through the good and gone through the bad,” said Friend, branch manager for Stockton’s Pacific Mortgage. His years of experience have left him with insight to offer clients seeking to buy a home or refinance a loan.

The veteran mortgage banker said that as the industry continues to stabilize, prospective homebuyers face an increasingly competitive market.

“There’s not a lot of inventory, so it’s extremely competitive,” Friend said. “Many clients are losing out to cash buyers.

Residents applying for home loans also will find the process to be a far more complex undertaking than it had been in the years leading up to the mortgage meltdown, he said.

“You have to understand that … what had been happening on the lender side was that they were making it easier and easier for buyers to qualify and provide less and less documentation,” Friend said. Now, he said, applicants should expect to provide two years of tax returns, pay stubs covering the past 30 days, and two months’ worth of bank statements among other records. They should be prepared to explain all bank deposits and to account for any credit blemishes.

“We’re paying for our sins,” Friend said. “I think we’re getting back to sensible underwriting and decision-making.”

He advises that those seeking home loans obtain pre-approval as early in the process as possible, making them more competitive with cash buyers.

He also encourages borrowers who bought or refinanced a house before June 2009 to explore refinancing options available through the Home Affordable Refinance Program (HARP) or FHA Streamline. The programs are designed to help homeowners take advantage of low interest rates, even if they owe more than their house is worth. “No appraisal is needed,” Friend said. “What we’re seeing is some of these clients are saving anywhere from $200 to $350 a month on their mortgage payment.” For information, call (209) 477-0600.

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