We receive construction loan applications every day and one of the most important variables when filling out the application package is completing all of the details. You know the old saying “We cannot read your mind” well some how customers over the past few years have been trained that filling out the loan application completely is not that important. Well, the simple stated income days are over with at least for the next few years until technology figures out a better way to verify the imperfect means for qualifying customers ability to pay back their monthly mortgage payment. Im here to say that’s impossible because even if you applied for a fully documented loan with 2 years tax returns, paystubs, w’2s and a high paying job, if you get fired tomorrow you still cannot afford to pay the monthly mortgage payment. So, fill out every detail of your loan application package and the odds are with the help of your loan officer that you will be able to obtain the best possible loan that best fits your overall needs. Most importantly no one knows what monthly mortgage payment you can afford to make better than you so stick to your personal financial requirements and you should do fine.

The construction loan market has officially slowed down and even though banks are continuing to tighten their guidelines banks are wanting business. Banks are wanting quality loans with excellent credit, cash equity, down payments, liquid assets etc. These are the same guidelines that were required 10 years ago before the recent real estate boom. Even though things have stepped back into good old fashioned credit risk criteria technology is still changing the future of lending with paperless speed and internet technology.

I cant remember a time when the mortgage industry was being hit so hard that everyday has a new surprise. First of all construction loans are probably the complete opposite of the sub prime market that everyone is blaming the crash on. Most families that are building a new home usually bring a big down payment to the table in the form of land equity. Secondly from my 24 years experience providing construction loans most families that build a new home typically have excellent credit.

Remember we are not talking about buying a newly built home with no down payment and poor credit we are talking about families that own land and build a new home for themselves. So now everyone is pointing the finger as to who is at fault for how easy it was to obtain a loan to buy a home. Well we all now know those days are over with and so now its a battle of who’s to blame. But before the finger pointing starts lets leave the quality construction loan market out of it with the exception of the natural falling appraised values in some markets.

So who’s to blame for this fiasco? First I heard Alan Greenspan was at fault for easy money policies then I heard it was the banks now I’m hearing it was the loan brokers selling these programs etc, etc, etc. As far as I’m concerned everyone and I mean everyone is to blame. Everyone from the Fed to the little guy knew exactly what was going on, now everyone is now playing dumb and no one wants to take responsibility.

So my advice is rather than watch the implosion of America and rather than watch the American economy turn into the economy of a third world country everyone better stop pointing and start resolving. If we all don’t focus on the solution our economy we could easily go into a economic dark ages never seen before.  I believe the new Internet economy and technology is changing everything from buying cars to having nationwide and worldwide businesses. I really think the digital internet economy and taking fiscal responsibilty is the answer to this crisis.