All types of loans are subjected to the criteria of character, collateral and capacity to pay, otherwise known as the “CCC criteria” among credit institutions. Residential real estate investment loans are not exempted from these criteria. Years have passed and a lot of lessons learned from the bad effects of the sub-prime mortgage scam that lenders of these investment loans inevitably constrict their loan windows. Institutional lenders are now subjecting themselves to self-regulation subsequent to the U.S. economy inching itself towards equilibrium. Indeed, the economy is easing, it is public knowledge that America’s loan delinquency rate is decreasing but the pace is slow and investments are “heating” in the alternative rental sector which is a logical consequence in housing thousands who were dislocated. Overall, tight credit bearing is not removed specifically the residential loans as lenders are not able to adjust absolutely avoiding speculation invoking the “CCC criteria” in a stricter sense.

The trouble is not absence or lack of money for loans but rather creditors are staying from demands by utilizing the “CCC criteria”, as mentioned before. This on the other hand, is an encouragement for lenders of the residential real estate investment loans to be prepared and careful. Lessons learned on the recent scam, both borrowers and lenders are practicing caution. Thicker “paper trails” is the result of tight credit situation. Borrowers now should be aware that lenders or creditors are extra cautious of the “person” or “character” of their borrowing client. Papers must be presented proving borrower’s credit standing and track record, employment history proving amount and source of income, real property assets with no liens and encumbrances or management experience if the loan will be use for commercial purposes. » Read more: Residential Real Estate Investment Loans