Obtaining financing is frequently cited as one of the most difficult obstacles in the modern real estate transaction and the numbers now show that it is not a problem with perception, rather a reality. The WSJ analyzed the 10 largest mortgage originators’ data to reveal a national average of 27% of all mortgage applications in 2010 experiencing a denial. The denial rate is up nearly 15% in the last year alone and it is likely denials will increase in 2011.

We’ve spoken for years about the pendulum swinging away from the Barney Frank’s push for homeownership for all back in the day (that led to risky loans) to today’s reality of increasingly difficult lending for any and all applicants.

Only two in three Americans who applied for a mortgage last year were able to move forward, but the data does not make clear whether or not all of those actually made it to purchase without a last minute lending issue (another commonly cited obstacle in getting a deal done).

“Although lenders were expected to pull back from the freewheeling conditions that helped inflate the housing bubble, some economists argue they are now too conservative, and say that with the U.S. economy still wobbly, mortgages need to be easier to obtain for qualified borrowers, not harder,” the WSJ reports.

Mississippi, Vermont & Texas have denial rates over 35%

In order of lowest denial rates to highest:

• 19.9%   Minnesota
• 20.3%   Virginia
• 21.0%   South Dakota
• 21.0%   Kansas
• 21.1%   North Dakota
• 21.6%   Iowa
• 21.8%   Nebraska
• 22.4%   Maryland
• 22.8%   Colorado
• 22.8%   District of Columbia
• 23.0%   Wisconsin
• 23.1%   North Carolina
• 23.3%   Washington
• 23.6%   California
• 23.7%   Massachusetts
• 23.8%   Alaska
• 24.4%   Delaware
• 25.1%   Missouri
• 25.1%   Pennsylvania
• 25.2%   Montana
• 25.5%   Illinois
• 26.0%   Connecticut
• 26.4%   New Hampshire
• 26.5%   Oregon
• 26.6%   New Jersey
• 26.8%   Wyoming
• 27.2%   South Carolina
• 27.4%   Arizona
• 27.5%   Hawaii
• 28.2%   Indiana
• 29.0%   Idaho
• 29.1%   Rhode Island
• 29.2%   Nevada
• 29.5%   Georgia
• 29.8%   Maine
• 29.9%   Tennessee
• 30.0%   West Virginia
• 31.1%   Kentucky
• 31.6%   Michigan
• 32.2%   Florida
• 32.8%   Oklahoma
• 33.0%   Arkansas
• 33.1%   Alabama
• 33.5%   Ohio
• 33.7%   New Mexico
• 34.1%   Louisiana
• 34.8%   New York
• 35.1%   Texas
• 36.6%   Vermont
• 38.9%   Mississippi

All of this highlights the importance of working with a team. Everyone on our team, starting with our Mortgage Broker, work to make sure our clients are well taken care of.