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Hopeful Buyers Get Financial Therapy from Builders

Daily Real Estate News | Monday, October 01, 2012

Homebuilders are conducting financial bootcamps to help buyers qualify for home mortgages.

Builders such as D.R. Horton Inc., Lennar, and PulteGroup Inc. are offering financial programs about repairing credit scores, creating budgets, and applying for loans to hopeful home buyers who are struggling to qualify for loans nowadays.

“These fiscal rehabs are one reason many builders are boosting sales, even though mortgage lending is tight,” Reuters reports.

For example, builders like D.R. Horton and Lennar have employed financial advisers that are helping potential home buyers with repairing their credit and developing strategies to help raise their credit scores. The buyers who go through the “financial bootcamps” are then typically able to get a mortgage from the builders’ in-house lending connections.

Some are leery about the financial bootcamps, however. Critics say that builders are helping buyers obtain government-backed loans that require no or low down payments.

“You have people applying for loans that there’s no way they can pay, but it doesn’t matter because the ability to repay isn’t the basis of the loan. It’s the ability to pass underwriting so the loan can be sold,” Brett Weiss, a bankruptcy attorney in Washington, D.C., told Reuters.

However, builders argue that the home buyers who go through their financial programs must still meet stringent underwriting standards for the government loans, and they insist that they are not putting people in homes they cannot afford. The builders say that buyers with enough cash and income actually are able to lower their monthly housing costs by buying a home than renting, since mortgage rates are so low and housing affordability so high.

Source: “Homebuilders Put Buyers into Credit Bootcamp,” Reuters (Sept. 28, 2012)

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Jorge Muñoz is a real estate professional with more than 11 years of experience in residential and commercial real estate in South Florida. He brings a solid business development background in obtaining clients, understanding their needs, providing viable alternatives and closing deals. Furthermore, he has established an exclusive clientele of real estate investors from South America, seeking to protect their assets outside the financial risks experienced in their countries of origin. Before becoming an independent agent, Jorge worked as the right-hand of one of the partners of celebrated developer J. Milton & Associates, one of the top 10 developers in Florida. He was crucial in the completion of the company’s single largest residential bulk deal with an international firm in London back in 2009, participating in the negotiations between the developer and the client to finalize the $42-million deal despite the raising uncertainty of the markets at the time. As an avid traveler, having visited 24 countries in Europe, America and the Caribbean, Jorge is sensitive to the idiosyncrasies of international buyers and has been able to build lasting relations that translate into repeated sales. For him, forging trust with clients is the most important asset anyone can have in this field. He holds a degree in Mechanical Engineering from the University of Florida, completed a Graduate Program in Administration and Management from the Harvard Extension School and graduated from Rutgers University with a Master in Business Administration. Jorge is also an active Florida licensed real estate agent. He speaks fluently English and Spanish and has a conversation skill level of Portuguese.

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