Credit crunch is slamming doors on many housing deals
BY LORE CROGHAN | DAILY NEWS STAFF WRITER
Friday, September 26th 2008, 11:05 AM
 Allison for News
Housing in East New York, one of the neighborhoods where banks have tightened their lending practices.
The Wall Street credit crisis has put many New York City residential real estate deals in jeopardy and scuttled countless others.
Real estate agents are seeing some purchases fall through because buyers can't get mortgages, John Reinhardt, CEO of Fillmore Real Estate, said Thursday.
"Banks are so cautious," he said. "Everybody's afraid more than normal - both buyers and sellers."
Neighborhoods where banks have tightened their lending practices are showing high foreclosure rates, including Canarsie, East New York, Bedford-Stuyvesant and Bushwick.
As a result, sale prices in those areas have dropped 20% from a year ago, Reinhardt said. In other parts of Brooklyn, prices are down 15% to 20%.
Buyers facing serious problems include those who signed purchase contracts a year or two ago at condo developments under construction in the Bronx, Brooklyn, Manhattan and Queens.
The homes are ready for occupancy and the buyers "have nonrefundable deposits at stake," said Melissa Cohn, CEO of Manhattan Mortgage Co.
These buyers face potential losses because they already put down 20% - and banks are demanding they pony up an additional 10% as security.
When buyers initially lined up their deals, reasonably solid credit scores of 650 were sufficient to qualify them for prime mortgages. Now they need scores topping 700. Some must find co-signers to get loans. |
