DAN'S PAPERS, April 17, 2009 Page 29 www.danshamptons.com
The Deal Slayers: Mortgages, Part 2 By Susan M. Galardi Last week, this column covered some of the issues that make mortgages another slippery stone in the path to closing on a property. In short, the state of affairs in financing right now is a tantalizing combination of cheap money and tight credit. But since not many buyers are walking around with a million in cash, those on both sides of a real estate transaction will probably have to deal with mortgage issues, in one way or another. A few developments last week further complicated (or simplified, depending on your point of view) the mortgage industry. The WellsFargo Wagon is still a-comin’ down the street, and maybe he’s got something for you — if you’re a client. But if you’re a mortgage broker, there’s nothing for you in that wagon. Not too long ago, WellsFargo announced that it would no longer give loans through mortgage brokers. In another blow to the mortgage industry, just last week Chase Manhattan Bank announced that it, too, will no longer lend via mortgage brokers. Even worse news, the PMI Group, the mega-mortgage insurer, has announced it will not underwrite loans that originated with a mortgage broker. In addition to these complications in the industry and the general economic state of the world, there’s a looming personal question: Can you get a loan at all, from any lender? There’s one way to find out, and that is via a “pre-approval.” While these don’t leave sellers jumping for joy and heaving a sigh of relief,
pre-approvals are critical for anyone needing financing to buy a house. Before even making the call to a real estate agent (and wasting everyone’s time), buyers can learn their credit scores and find out where they stand in terms of getting a loan, and for what amount. If there are red flags at this stage, chances are they will be blazing at the closing table, if you get that far. As far as where to get a loan, buyers should shop around to banks and savings and loans, as well as, yes, consulting with mortgage brokers. Despite the recent news, that latter industry is not dead. Brokers are still a viable channel with some banks. But now, banks now have a lot of volume with their own direct-toconsumer business and that channel gets priority. Once the decision of where to get the loan is made, the pre-cert process begins. Bank representatives look at the whole picture: all of the assets, income, employment, credit scores, and make a recommendation to the bank. That recommendation is in essence the preapproval. If all goes well, within two to four weeks if you’re lucky, the pre-approval morphs into a commitment letter from the bank. That commitment comes with conditions that must be met (and will be reviewed) at the time of closing, including another round of verification of employment, changes in assets and reserves. Buyers who want to be sure that the bank will come to and stay at the closing table in their time of need should see their financial
picture at the time the commitment as a snapshot. At the closing, the pictures better match up, exactly — in other words, don’t lose your job, don’t buy a car or take on any more liability. Because the banks are “sensitive” to changes in the financial picture, it behooves buyers, now more than ever, to get a mortgage contingency clause in the contract, e.g., make the sale of the property contingent on their securing financing. For the seller, this is a touchy area. While no sane buyer who needs financing would risk signing a contract without a contingency (unless he doesn’t mind losing his deposit), it creates doubt for the seller. Needless to say, cash buyers have a bit of an advantage these days, but according to insiders in the real estate industry, the phrase “cash is king” has resulted in king-sized egos. Cash buyers, while a more sure bet for closing, tend to be the ones making the rock bottom offers to sellers. Is it worth it for a seller to accept a lower offer from a cash buyer? Or a closer-to-asking bid from a buyer with a mortgage contingency? If you’re the seller, that depends on the answer to these questions: Do you need money from a sale soon? Or do you need a specific amount of money sooner or later? Sellers who go with a mortgage contingency contract can do a few things. First, find out if the buyer is at least pre-approved. Next, limit (Continued on next page)
EVERYTHING OVER A MILLION Sales Between 1/30/2009 BRIDGEHAMPTON
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Douglas & Alison Greenig to Edward M Lederman, 77 Jennifir Lane, 2,150,000
SAG HARBOR
Shirley Cernichiar to Peter A Poelzlbauer, 9 Chester Ave, 1,225,000
Estate of William P Mulvihill to County of Suffolk, Clay Pit Road, 1,445,000
CUTCHOGUE
James Heffron to Debra A Stabile, 9280 Nassau Point Road, 2,690,000
EAST HAMPTON
Accurate, up-to-date, affordable, on-line information about all real estate transactions in your community. Our weekly reports contain:
238 OTR Associates LLC to Town of Southampton, 238 Old Town Rd., 2,600,000 Patrick J Badolato to Michael Schessel, 20 Lake Drive, 1,150,000
Gary & Charlotte Depersia to Leslie K Valente, 54 Canvasback Lane, 4,000,000
James D Foley to NOLI Realty LLC, 10A Sunshine Road, 1,240,000
Star Ranch Co LP to Alicia Zarou Scanlon, Startop Drive, 1,800,000
Robert Chaplin to Deborah Morel, 210 Little Noyack Path, 2,642,000
EAST QUOGUE MONTAUK
Estate of Sema Hoffman to Judithmarie Collinson, 11 Willow Lane, 1,100,000
AMAGANSETT
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Robert G Lauriguet to Laurel Stone Supply Plus Inc, 7055 Main Rd., 825,000
MONTAUK
Susan M & Stephen Breitenbach to Anita Sosne, 2316 Main Street, 675,000
Glenn Behr to Peter & Jeanne Leonard, 71 Glenmore Avenue, 927,500
EAST HAMPTON
ORIENT
Lisa Borg to David A Kaminsky, 11 Wagon Lane, 650,000
Debra Fahey to Peter M Schembri, 1425 Sound View Road, 998,100
Renee & Adam Rosenfeld to Albert E Clarke, 4 Waterhole Road, 605,000
PECONIC
Shawn & Andrew Frankel to Shawn Frankel, 4 Blueberry Lane, 600,000
Alettha Wendy to Yvonne M & Sal R Varano, 1540 Robinson Lane, 708,000
EAST QUOGUE
Heater Trust to Kathleen & Cyrille Briancon, 6130 Indian Neck Lane, 690,000
GREENPORT
1143168
WESTHAMPTON BEACH
Mitchel Hisiger to Maria Pia Ruffilli, 68 Jagger Lane, 1,175,000
Carol Anne DiPaolo to Maria A Varrichio, 28 Ditch Plains Road, 945,000
DKS Limited Partnership to Dorothy M & Charles D Reid, 160 5th St #30F, 690,000
For more info, call: 631-539-7919
WATER MILL
BRIDGEHAMPTON
Jacqueline Krentzel to Matthew Setzer, 7 Friese Drive, 500,000
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SHELTER ISLAND
Of Not Quite A Million During This PeriodV
John Dineen to Lyle Greenfield, 66 Beach Avenue, 675,000
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SOUTHAMPTON
HDA Parish LLC to Robert Tillis, 34 Parrish Pond Lane 3,450,000
Lawrence & Gracia Koncelik to MHR37 LLC, 37 Mile Hill Road, 2,210,100
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SAGAPONACK
John J & Eileen M Farrell to John J Farrell, 36 Sagg Pond Court, 2,599,400
Estate of Daisy Franco Skendi to Tropical Bamboo SA, 54 Fithian Lane, 1,790,000
NORTH HAVEN
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Jed E & Abigail C Schutz to Maria Rosa Montalva, 18 On The Bluff, 6,000,000
3234 Kellis Pond West LLC to IGM Realty LLC, 34 West Pond Drive, 5,062,500 Robert Rufino to Laura M & Kurt M Steltenpohl, 162 Hildreth Lane, 1,485,000
Now w Available!
and 2/12/2009
Net Net LLC to Suzanne Hagerstrom, 63 Ferry Road, 2,200,000
HAMPTON BAYS
QUOGUE Joseph D Ciampa to Rose & Dominick Ciampa, 18 Dune Road, 544,000
SOUTHOLD Giuseppe & Cristina Como to Landers Family Trust, 800 Lakeside Dr., 975,000
Deborah Lovett to Preacher Properties Inc, 220 East Montauk Hwy., 970,000
WESTHAMPTON
Linda S Morrison (Referee) to Wells Fargo Bank, 3 Bay Avenue, 545,300
Robert Brassacchio to Catherine Briguglio, 6 Windwood Court, 635,000
MATTITUCK
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