Bay Area, California Mortgages: Difficult to Afford

There were more signs last week that individuals are having a tougher time securing home mortgages in the Bay Area, NBC11’s Marianne Favro reported.

Realtor Pegah Lavassani said lenders are making it tough for her to close deals.

“The last three transactions I’ve had have fallen through because of financing,” Lavassani said. “Buyers are not able to get financing on the [California mortgage] loans.”

Chief Investment Officer Mark Duvall with Opes Mortgage Banking in Palo Alto said lenders are now much more cautious.

“Lending standards were greatly softer for awhile, but with delinquencies on mortgages rising, lenders are backing away and that is leaving us in a credit crunch at the moment.”

Experts said the changes mean fewer lenders are willing to fund second mortgages.

Those looking to buy may need to put more money down, while providing more documentation to prove to lenders they can actually afford what they want to buy, Favro said.

“I think there will be a slightly smaller number of buyers, people reaching to get into a home,” Duvall added. “(They) will have a harder time getting financing to buy that home.”

The shift has also meant more foreclosures, including people who had adjustable loans and currently cannot get refinancing for a new loan.

Many Bay Area homeowners can no longer afford their mortgage and have had to abandon it to the bank, Favro said. It’s an issue that may not correct itself until the housing market picks up both nationally and locally.