NINJA mortgage? No income, no job, no assets.
mortgages are disappearing in the Spartan post-meltdown era, supplanted
by a decidedly old-school mode of financing – cash.
In what experts
say is a sign the battered U.S. housing market is cautiously finding
a bottom, more Americans than ever are choosing to plunk down cold,
hard cash to buy homes.
Cash was the
currency of choice in 27 per cent of all homes purchased in the
United States in March, according a survey by the U.S. National
Association of Realtors (NAR).
That’s up from
18 per cent a year earlier – and well above the historic norm
of less than 10 per cent. Even those who do get mortgages are making
much larger down payments than in the past.
had this huge pendulum swing – from liar loans, no-doc loans
and no-income loans – to no loans at all,” NAR spokesman
Walter Molony said. “We’ve gone to the opposite extreme.”
Blame it on
a combination of extremely tight credit conditions, a glut of foreclosed
properties, sellers eager to get their money out without strings
attached and a surge of buying by investors, who see the best real
estate values in years and don’t want to share the profits with
Even with interest
rates at historic lows, banks are no longer offering the generous
terms that were once commonplace.
this more the case than in the areas of the country that saw the
most speculative excess in the boom years – California, Florida,
Nevada and Arizona. In Miami, for example, well more than 50 per
cent all transactions are now in cash.
out of 10 deals we do are all cash,” said Miami real estate
agent Peter Zalewski of Condo Vultures Realty.
virtually the only way to get a deal done in south Florida, especially
if the property is a condo.”
for cash is a function of both cautious lenders and nervous sellers,
suggested Mr. Zalewski, who specializes in brokering bulk condo
so badly burned during the boom, major national lenders have virtually
pulled out of the Miami housing market, he said.