Risk vs Benefit in Lending

Well FICO score used to tell it all to us...we knew where we were, knew what our payment history had been and now even credit cards are getting harder and harder to get! What to do now? Who really knows when it comes right down to it? Here is an interesting article talking more about what else is to play when it comes to credit. You can read more online at www.InvestSmarter.com also:

Daily Real Estate News June 23, 2008

Going Beyond the Credit Score

Fair Isaac Corp. and the credit bureaus have rolled out numerous products to provide lenders and investors with alternatives to the FICO score in assessing borrowers' default risk. The Credit Capacity Index from Fair Isaac gauges how well borrowers manage incremental debt, while Trend Data from TransUnion gauges the performance of loan portfolios when specific variables and regional economic indicators are factored in. Steps also are being taken to improve the tools available to mortgage lenders to assess default risk, with industry experts pointing out that FICO scores were inadequate on their own because credit bureaus receive mortgage data without knowing the type of loan and are not given access to copious amounts of data on the performance of loans held in lenders' portfolios. National Bank of Kansas, for instance, is going beyond the FICO score, also using a fraud score, risk profile, appraisal review and an expanded team of risk managers and underwriters to reduce default risk. Source: American Banker, Kate Berry (06/18/08)

So what do we really have to look for? WHat is the new standard if you will? For more information on what's available for sale in the Panama City Beach and Panama City Condo market please visit us online at www.panama-city-beach-florida-condominiums.com and see what awaits you in this little piece of luxury!

Panama City Condo Blog Launch and Developer Remorse Info

The Panama City Condo market like many others is in a very interesting position right now. Occupancy on units closing in the last 6 monthes is probably close to 50% or less. Some buildings are all but vacant. This poses an interesting plan for a buyer and a very negative position for a seller if that is occuring in your building. A few developers here in the Panama City Condo market are seeing problems. Shores of Panama is one example, followed closely but more severly by Lake Town Wharf. Both of these projects were taken back and now bank owned. Shores of Panama Sold the majority of their units while it is rumored that Lake Town did not fair quite so well. The Baltimore Sun just recently published the article below and it is rather interesting and provides some national input into this market:

Daily Real Estate News May 30, 2008

Condo Developers Battle Buyer Remorse

Buyers who renege on a contract to buy a condominium are a growing concern to developers."There's a fine line a developer has to walk to get these unsold units off the market," says William Rich, a vice president of Delta Associates and director of the firm's condominium practice.Rich says builders in the Baltimore-Washington region have taken steps ranging from converting for-sale projects into rentals to offering buyer incentives. But they avoid lowering prices because it upsets buyers under contract at higher prices, he says.

Some builders are forgoing preconstruction sales altogether. Instead, they wait until the project is complete to set prices. Rich says that might make sense. "If a building is already up, it doesn't give buyers months to think about canceling a contract," he says. "These contracts are more likely to go to closing.”The Ritz Carlton, which is building its first-ever all-condo complex in Baltimore, says its potential customers are too well-heeled to worry about the economy, but "If we have certain situations that are challenges, we would work with individuals on a case by case" basis,” says Gabe Pasquale, director of sales for RexCorp Realty, which has joined Ritz developer Midtown Equities LLC to form RexMidtown LLC.Source: The Baltimore Sun, Lorraine Mirabella (05/29/08)

Now the interesting point of building then selling is the fact that you better have a big bank roll! Most of the developers in this Panama City area have needed the presales to get financing from the bank. However, from a long term capital standpoint they have a great idea here. It will be interesting to see what happens in the future for Panama City Condo projects. But until then, the major benefit is that as developers take back units you can prepare yourself to make a plunge and save at least 10% off the ORIGINAL contract position. But have cash or be in good standing with a lender. Even with Panama City Condo purchases, banks are tight these days also but the right combination of a mortage lender and Real Estate Broker put you in the best postion when negiotiating a Panama City Condo.