Tucson, AZ

Tucson’s real estate market enjoyed booming sales just two short years ago. About mid-2006 the market started to slow down a bit and now seems to be moving at only a trickle of its previous pace. There are many factors that go into this slow down and we won’t go into all of them here.

This morning it was announced that local mortgage lender First Magnus would no longer be funding new mortgage loans. Their announcement follows on the heels of the announcement by American Home Mortgage on August 3rd that their company would no longer be funding mortgages. American Home Mortagage filed for bankruptcy a few days later.

Part of the reasons given includes the risks taken when lending to the segment of the population with poor credit histories. During the boom there was a lot of creative financing to get just about anyone into a home. Now that the pressures of paying for those homes has hit many can’t make the payments they thought they could.

Speculation says that First Magnus is closing but sources tell the Arizona Daily Star that they don’t think that will happen. What happens to those whose loans are pending remains to be seen. First Magnus is also one of the larger employers in the Tucson region and the fate of hundreds of employees hangs in the balance.

As home prices decline and lenders declare bankruptcy what will this mean for the real estate businesses? It certainly indicates a very lean time for those businesses that rely on real estate sales - agents, brokers, lenders, appraisers, home inspection companies. Hopefully during the boom a few years ago these individuals were smart enough to save for a rainy day because it looks like there is quite a bit of rain in the forecast.

Images courtesy of Stock Exchange
Source article - Arizona Daily Star

real estate, mortgage lender, First Magnus, American Home Mortgage, bankruptcy