Indianapolis Real Estate and Ties to Lending

While Wall Street is recovering from the mess of the Fannie Mae and Freddie Mac bailouts, the regular consumer that is applying for a home mortgage has come up against more restrictions than any time in history. As the local economy in Indianapolis is still strong, the creditors will have to force themselves to set aside some of the stiff practices that are used to determine creditworthiness. The Indianapolis real estate agent is also a victim in a list of casualties from lending institutions. These agents received partial commissions doing what they needed to in order to get a loan.

There were problems that were created by the lending institutions. Guess who is paying the price? The housing market and the consumer. With Indianapolis real estate, the lending market provided loans that were easy to acquire until the latter part of 2006. This was when the overall real estate market started to bleed with properties that were not selling. Up until then, there were mortgages that did not require a down payment. In addition to that, there were borrowers that had bad credit and the income verification process was not adhered to properly. This caused mortgages to default because the borrower could not continue to afford the ARM (adjustable rate mortgage) loans.

To add to the problem, there were lots of financial institutions that would stick with a certain appraisal company and do a lot of business with them. This would assure that the property appraisals would have a favorable rating in order to get the mortgage. This was happening even though property values were steadily decreasing at a rapid rate. This was caused by the real estate market becoming oversaturated with mortgages. Even with Indianapolis real estate agents, they had clients that went to a certain lending company so that they could get the business. This is when things really got out of control.

Now there are more restrictions that are in place as a result of what happened. It was basically a reaction instead of being proactive to keep this fiasco from happening. Nowadays, in order to get a mortgage, your credit score must be over 650 points. A lot of former Indianapolis real estate agents cannot secure commissions like they used to because of the change. Some of them have even filed for bankruptcy.