The new rules of the credit crunch

Good-bye, easy money. Hello, credit squeeze.

If you haven't tried to borrow since the subprime chaos began, you'll find your friendly money bazaar a much more cautious place.

The lenders that in 2005 threw funds at anyone with a pulse have begun to insist on proof that borrowers have a prayer of paying them back.

Even if you have a high credit score and a flush bank account, you'll likely feel the difference. So you'd better get to know the new rules.

Mortgages

What's happening: Several species of exotic mortgages are headed for extinction, including the 2/28, the 3/27 and those requiring no proof of income, says Paul Haarman, vice president of Renaissance Mortgage Corp.

But the effects of the mess have extended beyond subprime.

According to the Federal Reserve, about one in seven banks has toughened home lending standards even for borrowers with good credit.

You'll find lenders stingier on appraisals, more persnickety on documentation and far less likely to finance 100 percent.

Also, at the high end, rates on the 30-year jumbo (over $417,000) jumped nearly a percentage point between June and September.

What to do: If you have an adjustable-rate mortgage, read your agreement to find out when your rate will reset, how high it will likely go and how high it could go.

If it's coming due and will end up above 7 percent, consider refinancing to a fixed rate. You'll need 10 percent equity and a credit score over 660.

Must buy? Get the best fixed rate you can (rates on a 30-year fixed are currently a sliver above 5/1 ARMs).

Obviously, this person isn't an investor or he would have given much better advice. I found this on the front pages of Yahoo.com around 10PM last night.

If this is the best they can come up with to help buyers find a house I only have one thing to say, "Yippee ki yeah Investors!"

Biscuit Run Development Approved

On Sep 13th, the Albemarle County Board of Supervisors approved developer Hunter Craig's 882 acre Biscuit Run Development.

A minimum of 3,100 new homes on the Albemarle property along Rt 20 South can be built.

Opponents called for more extensive environmental impact studies but the BOS voted unanimously to allow rezoning of the property.

But Craig's $41.15 million proffer offer ruled the day.

Albemarle BOS sees the develpment as a way to steer the thousands of people moving here into designated growth areas.

Albemarle County Family Tries To Build A 19,500 Sq Ft

Home on Turner Mountain in vy (where I live).

The neighbors heard the numerous chainsaws buzzing away and called the Albemarle County zoning inspectors & Piedmont Environmental Council.

A STOP WORK order was issued.

Turner Mountain allows homeowners a one time 1.7 acre clearage and since 1 acre was already cleared for the present house, the county said no.

Apparently the homeowners had prior approval but this was found to be a clerical error.

The average Turner Mountain home is cedar-sided, unobtrusive and back to nature.

The owners offered to throw a neighborhood party and asked that bygones be bygones.