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Mortgage underwriters getting stricter

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Ted Haggart cringes when he watches or reads news accounts about a federal "bank" bailout program."It just kind of makes your blood run hotter than normal," said Haggart, Douglas County Bank president and chief executive.That's because most community banks throughout the country, including those in Lawrence, are not the ones being bailed out. The failed financial institutions are not banks."We've not done anything close to the subprime-type of mortgage lending," Haggart said. "We've always had very careful qualifications."Over the past several weeks Haggart has heard people ask, "well, are you still loaning money?" By now, however, he thinks most people know that loans are still being made and that the nation's financial problems originated elsewhere.Home loans are still available for those who qualify, Haggart said. The only difference now is that the mortgage loan underwriters that take the loans into the secondary markets are becoming more restrictive, he said."They are looking at the appraised values of properties based on comparable sales that are very recent," Haggart said. "All of these institutions are being very cautious about what is the true value of a home being financed."In some cases an underwriter won't accept the appraisal, even though there is a perfectly good borrower, Haggart said."We are doing some direct lending in cases where there is a very good borrower who just can't get (a loan) accepted in the secondary market," Haggart said. "We're doing that and keeping it in house."Most home loans are going to involve 80 percent financing, which means the borrower must come up with the 20 percent down payment."There are still some 90 percent loans but nothing above that," Haggart said.

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