And it was an excellent article to boot about how skiddish lenders are changing their minds and denying previously approved mortgages to people right before closing.

That’s gotta hurt.

A buyer may be able to find another lender to do the deal… but maybe not. If the transaction falls apart the buyer is at least out all of his time, the cost of the home inspection, possibly moving and storage expenses, and may have to scramble to a place to live on very short notice.

This explains a lot.

In Olson’s estimation, at the peak of the housing boom, roughly 20% of the mortgage market was subprime, and nearly 20% was “Alt-A loans” “” or “A-minus” loans, typically for those with good credit but with high debt-to-loan ratios or little or no proof of income. Both categories are now nearly extinct. That means about 40% of the residential mortgage market has all but disappeared.

Here’s Heather’s bit.

“Now, buyers are not sure they can get a loan at all,” Barr says. Some buyers, she says, are reluctant to believe that a loan approval contains an expiration date: “The lending rules do change day by day. I tell my clients, ‘If you were approved more than three weeks ago, you need to go back and talk to them again.’ “

Yep, I don’t get calls anymore from folks asking me about the advisability of using an interest-only loan.

“It used to be that if you had the pre-approval, you were good,” says Johnson, an agent at Chase International, a regional independent brokerage in Reno. “Now, five days before closing, you learn that the financing isn’t there anymore.”

Check out Heather’s North Phoenix Real Estate Blog here.