June was a big month in the housing industry this year. We celebrated National Home Ownership month, and we saw an end (an almost end) to the National Tax Credit for certain homebuyers. I started thinking about what the real estate market was like 30 years ago...how has it changed? For the better or worse?
We have seen a lot of change in the mortgage industry and how mortgage loans are processed. Fax machines were not a staple in offices and overnight mail was very expensive. Most items were ordered via courier or regular mail and business was done very locally. A credit report took 4 days to receive. The loan officer sent a check for about $65 to the local bureau and waited for the report to be ready for pick up. Appraisals took a full two weeks to complete and were hand delivered as well. Verification of Deposits, Verification of Mortgages, Verification of Rents, and Verification of Employment were all mailed out and the mortgage company waited for the originals to be completed and returned. The borrower did not submit underlying documents such as tax returns, bank statements, or paystubs. The only supporting documents were the "verifications"!
According to the US Census Bureau, the median sales price in 1980 was $93,400 for the United States. The rate of default was much lower back then, but that is understandable considering conventional loans required at least 20% down. There were no "Alt A" products in the 80's. The primary loan products were Conventional (20% down) and VA.
All in all, mortgages took 45-60 days to complete. Not at all unreasonable considering most escrows run well over 30 days. Have things really changed that much or are we just headed full circle?! Paula Hester--Escrow Admin DFW
