Home buying not for faint-hearted

  • Sally Murphy of Windsor unpacks household belongings, Tuesday Dec. 6, 2011 in a home that she bought on short sale. (Kent Porter / Press Democrat) 2011

To purchase her house this fall, Sally Murphy was required to sign twice as many loan documents as she had done for each of her past four homes.

The 66-year-old dietician then watched in horror as the title company took until the final day to meet a bank's deadline for transferring ownership on a four-bedroom house in east Windsor, a short sale.

Murphy received title for the house with just 20 minutes to spare, the same amount of time she had remaining to rush across town and pick up keys so her flooring contractor could gain entrance to the home the next morning. She moved in about a week ago.</CW>

Buying a house today isn't for the faint-hearted.

Even though home prices in Sonoma County are the lowest in a decade and interest rates are hovering near historic lows, completing a deal is no easy task.

With more than 10,000 homes lost in foreclosures and short sales in Sonoma County during the past four years, buyers are finding the market has been reshaped by an abundance of distressed homeowners and by so many loans gone bad.

"We're all operating under a cloud of fear," said Pete Phillippe, a loan officer with Princeton Capital in Santa Rosa. "And it's that fear that I think is really putting a damper on the market."

Banks are taking every precaution to make sure they aren't held responsible for any more loans that go delinquent, loan officers said. As a result, buyers who want to get a mortgage today are expected to reveal much more about their personal finances. Bank deposits and tax returns receive extra scrutiny.

"The process of getting a mortgage is much more intrusive now than it's ever been," said Otto Kobler, branch manager at Summit Funding in Santa Rosa.

The files are twice as thick as they were five years ago, Kobler said. And if an underwriter sees any anomaly in an applicant's tax returns, "she's all over it."

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