Carlos ThurdeKoos, Broker, MCT Realty writes about the present policy of Financial Institutions towards Foreign Nationals purchasing Real Estate in Florida.

Not a day goes by without Newspapers, Magazines, Internet, TV stations, Syndicated programs, etc., reminds all of us that Foreign Nationals (FN) are taking advantage of a week dollar and investing heavily in the United States, especially Florida. The majority of these individuals, Corporations, etc., are putting down-payments anywhere from 20 to 50 %. It is a good deal for them to buy property here at “a big discount”.  Not only prices are down but they are also buying property at “discounts” ranging anywhere between 10 to 50 % (because of the currency exchange).

One might think this a great for our Real Estate market, all the Sellers that have listed properties just sitting there with no buyers; might event think it is great for financial institutions that are complaining about buyers that do not “qualify”.  But the financials institutions in their great wisdom have decided to stop offering loan programs to FN or drastically reduce the LTV (Loan to Value) to 50 to 60 %. Reason: to reduce the risk of FN defaulting AND in case they do default, the Bank would have sufficient equity and not suffer losses …………   what a great philosophy!!!!!!!

But wait ……   aren’t these financial institutions the same that previously offered FN up to 100 % financing? Aren’t these institutions the same that previously gave loans to FN without credit report, without income verification, without even verifying if the buyer ever entered the US to see the property and sign a purchase contract? Aren’t these the same institutions that allowed closings to take place not only with 90 % LTV but with 10 % and sometimes 12 % commission paid by the developer to the selling broker ??????

Please do the math.

At the present time, in my opinion, FN are the best buyers available. All the financial institutions need to do is use common sense and apply good prudent policies and procedures for verification of assets, income and credit worthiness.