Realtors and their lenders have conflicting viewpoints when it comes to the real estate market in Denton.

Some say homeowners need to stay with their current loans, and consider looking into Federal Housing Administration loans if they are in a bind, while others blame banks for keeping customers from acquiring new home loans.

Stacy Curtis, president of Curtis Mortgage, says the local market is going through a slowdown.

“The situation is temporary,” Curtis said. “The national media presents it as a mortgage crisis, a Wall Street crisis. ... In our area, because we continue to have population and job growth, this is more of a slowdown, not a crisis.

“And it’s a slowdown from the record-setting pace of the last few years,” he said.

Real estate agent Esthela Hall, who has been in the business for the nine years with Real ‘T’ Team, said she hasn’t been able to sell homes since late February.

“It is getting more difficult for buyers to buy these days,” she said, blaming the banking industry and the current state of the market. 

“I have buyers, but I cannot get them approved,” Hall said. “They have decent credit and are people who can get into a home.”

Rey Sanchez, a mortgage lender with Amerinet in Denton, also said home loans are harder to get.

In his nine years as a lender, he said he’s never seen the market in the current state with such stringent standards — credit ratings of 580 and above, requiring buyers to have a down payment before processing a loan.

“A client can buy a house any day. It is financing that is the problem,” he said. “A lot of investors have tightened their loan guidelines, affecting everyone in the real estate business.”

Lanita Angel-Morris, a real estate agent for the past 13 years with Angel Realty Team DFW, described the market as unusual.

“I am not complaining,” she said.

She has continued to sell homes within the $110,000 to $350,000 range, but she credits her good fortune to second-time clients interested in buying new homes.

“Denton is the on the verge of becoming the next Frisco,” Angel-Morris said. “I would not leave real estate for anything.”

The latest statistics from Metrostudy, an industry data source, concluded that tougher underwriting standards and mortgage terms have decreased the pool of potential buyers in the housing market.

Although in a decline, home sales continued to increase in some of the county’s new subdivisions, such as Paloma Creek, Lantana and Sunset Pointe.

Annual closings were down 8 percent in the first quarter compared to the fourth quarter of 2007, according to the report regarding new inventory of homes priced at less than $250,000 around the Dallas-Fort Worth area.

Last month, the Foreclosure Listing Service reported foreclosures were up 40 percent in Denton County causing much alarm in the housing industry.

With such gloomy reports, it is difficult to pinpoint the health of the market, officials say.

Curtis says he believes it’s still a buyers’ market.

Citing the Metrostudy report, he said builders are continuing to sell homes.

Curtis said he believes it is a great time for first-time homebuyers because interest rates are low — below 6 percent.

He agrees there are tougher credit standards for homebuyers, especially with income-stated loans, whereas before, individuals could acquire mortgages without verification of their income.

“These are the loan types that have been hit the hardest, along with 100 percent loans,” Curtis said. “[There are] very few loans available, with much tougher guidelines.”

In order to gain market share during the housing boom of 2005-06, some lenders became more and more liberal and presented products like income-stated loans to clients, Curtis said.

“When those loans start to fail, products get more conservative,” he said. 

Still, Curtis said, buying a home is a commitment and people needed to accept some responsibility for their decisions.

Advice for troubled homeowners

Before homeowners rush to sell their homes to get out of their bad situations, they need to understand how the housing market works — loans and home prices and how the values of their homes are determined, officials say.

For example, homeowners need to understand appraisals if they are considering selling or purchasing a home.

“Appraisers must compare what is being sold right now, the most recent sale data available to determine a price of a home,” Curtis said. “Foreclosures, short sales [when lenders accept less than the amount owed on the value of a mortgage] still count as a sale.”

He explained that a home’s value is determined by the worth of neighboring houses — whatever prices nearby homes are bought and sold for.

“Once we work through the inventory of foreclosures, home prices will start to rise,” Curtis said. “This phenomenon is isolated to mostly new subdivisions built in the last few years. People buying or selling homes in older, established neighborhoods will not face the same challenges.”

Curtis, who joined others with his own upside-down mortgage on one his properties, said he would stick to his house and others should as well.

“I purchased a investment property for $180,000 in June of 2005. Last summer, it appraised for $194,000; now it is at $175,000,” he said. “I’m holding on, assuming by the end of this year or next, it will be back up.”

For other homeowners — those who are suffering and cannot make their current payments — he suggested looking into an FHA loan.

These loans insured by the government offer low down payments and lower closing costs and provide an easier guidelines to qualify for credit. According to the Housing and Urban Development Web site, these types of loans have been around since 1934 and can be helpful for that first-time homebuyer, individuals who may want to fix up their homes, and seniors 62 or older who may want lower payments.

“The new FHA loan limit is $271,050, and you still only need 3 percent down payment with a credit score as low as 550. If you buy a HUD home, that down payment can be as little as $100,” Curtis said. “Additionally, FHA has new provisions to help struggling borrowers refinance their adjustable rate loans.

“People who live in this area and want to own a home, need to stop listening to the national doom-and-gloom reports and get out and buy,” Curtis said.

“This is the best I’ve seen in my 10 years [of] doing loans in Denton,” he said of how low rates and lower home prices create a good housing market.

KARINA RAMÍREZ can be reached at 940-566-6878. Her e-mail address is kramirez@dentonrc.com.