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Will Bank Turmoil Create Mortgage Challenge?

Buyers may need to shop around for a mortgage. If clients pulled money from a regional bank or deposits went down, the bank may make it harder to qualify.

NEW YORK – Banking center unrest could make it more difficult for some consumers to get a mortgage loan or a loan for other big-ticket items.

Real estate agents report increased hesitancy among buyers, even compared with recent months when mortgage rates hit record highs. Before the recent banking tumult, consumers were under pressure after borrowing costs rose dramatically over the past year as the Federal Reserve lifted rates.

But to the extent banks are “having difficulty getting deposits, they’re going to have to cut back on lending, which they’ve already started to do,” says Jack Ablin, a founding partner of wealth-management company Cresset Wealth Advisors LLC. “Someone who wants to refinance a mortgage or buy a boat or fund a kitchen remodel – they’re going to have a more difficult time.”

It isn’t only the credit crunch that could cause consumers to delay big purchases, says Steven Blitz, chief U.S. economist at TS Lombard. It’s also a loss of confidence and a reluctance to take a financial leap when the landing spot is a moving target.

Consumers uncertain about their personal finances or the broader state of the economy might reconsider a major financial decision, and whether waiting might be the more prudent move at the moment.

Blitz says more consumers are asking, “Am I going to go now and take out a first mortgage and buy a house?”

Source: Wall Street Journal (03/21/23) Rubin, Gabriel

Scott Critzer

Scott Critzer began working in the construction and real estate business more than 30 years ago, after graduating from Virginia Tech’s top ranked Department of Civil and Environmental Engineering with a Bachelor of Science in Civil Engineering. He worked first as an engineer for a commercial developer and later as a development project manager. Continuing his education, Scott graduated from Georgia State University College of Law in 1993 and opened his law practice in Atlanta where he worked litigating real estate cases and performed real estate closings. He has been a member of the Florida Bar since 1995 and moved permanently to the Emerald Coast to become Corporate Counsel, and later General Counsel of a title insurance agency in Destin. In 2008, Scott Critzer renewed his private practice concentrating in the areas of real estate and banking law. Since then Scott has provided legal advice to a wide range of corporate and individual clients throughout the Southeastern U.S. in real estate law (including closings), banking law, creditor’s rights, business law, probate-trust law and other civil matters. Scott provides a personal approach to the practice of law, taking time to get to know his clients. He takes pride in being able to explain difficult concepts in easy-to-understand terms in order to empower a client to be fully included in the legal process.