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Low Mortgages Rates make it Hard to Qualify

May 6, 2012 by  
Filed under Mortgage

You might wonder why when the rates are so low with banking institutions that mortgages are harder to qualify for. It would be theoretically better for everyone to allow many homeowners to take advantage of the low rates for the simple cause and effect, yet this does not seem to be what is happening.

Yes, mortgage rates are the lowest they have been for more than four decades, but that does not seem to be helping must home owners. These homeowners who are facing foreclosure as a result of missed payments are unable to get a refinanced mortgage that would lower their interest rate and therefore their monthly payment. Banks want to give the best rates to the consumers that have shown they are worthy. In fact, the market has always been about rewarding those who worked hard to keep their credit clean. Well, for the most part. Those who have little to no credit and top credit card scores are also getting penalized with higher than average interest rates.

Most banks are holding on to their money rather than approving the majority of mortgage applications that are coming through their companies. This month has even struck a new problem. Many banks are now being forced to stop foreclosure proceedings until reviews of each and every account have been completed. More than 50,000 loans in the United States were signed off  without a full review by the top bank manager in the foreclosure department. Instead, these individuals just signed away hoping their other employees did their jobs. This has led to an investigation when more and more complaints rolled in from consumers regarding their treatment at banks.

All of the information with regards to the lower rates, harder to qualify mortgages, and high foreclosure proceedings is leading to an end that is not pretty for banks. Consumers are being forced to seek other methods where they know the product is not stellar, but at least they are aware of the troubles pay loans can cause.

If you are in a situation where you need to refinance or obtain a mortgage the best thing to do is research all the banks. Look at how each one has worked in the past three to five years. What companies were better with their consumers? Which banks are more willing to lend a hand to consumers now?

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