To avoid the mistakes — and fates — of reckless lenders who contributed to the economic crisis by lending money to people who were (or became) unable to pay it back, Irving says that "responsible lenders are taking time to verify income, job stability, residual monthly funds ... and taking time with borrowers to fully explain" the terms and features of their mortgages.
"With the predatory and less traditional lenders out of the market there has been a 'return to quality,'" MaineHousing's Peter Merrill said in an e-mail to the Phoenix.
Borrowers, too, are coming to the table more informed and logistically prepared, brokers and bankers say. (See the sidebars for thoughts from real homebuyers.) They're coming to lenders with a solid idea of their credit history and available funds. Many are taking advantage of the hoMEworks first-time homebuyers' course offered by MaineHousing — a low-cost class that qualifies its participants for lower loan interest rates. And now, they have an $8000 tax credit to add to their toolkits. This tax credit (check with a tax pro for the details, but generally it reduces the amount you owe in income taxes, and may land you a tax refund) is substantially less than what some real-estate observers were hoping for — a heftier $15,000 credit. However, unlike the $7500 tax credit passed in the middle of last year with a similar goal in mind, the one bundled into the stimulus bill does not have to be repaid over time.
Of course, none of this matters if lenders don't feel secure in whom they're lending to. This is a vivid reminder of how closely linked the job and housing markets are. (Maine's unemployment rate, 7 percent, is almost at the national average of 7.1 percent.) No one will buy houses in Maine if they can't support themselves, and vice versa. As Portland homeowner Jed Rathband points out, "I'm not as concerned about the value of my house — though it is less than what I currently owe — as I am worried for my ability to continue working in Maine."
Deirdre Fulton can be reached atdfulton@phx.com.
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