California Home Loans

California Mortgage Loans

Gustan Cho Associates

California has one of the highest housing values in the nation.  California home values have always been much higher than the average home values throughout the nation.  Even prior the 2008 Great Real Estate Crash, home values in California have been much higher than any other state in the United States.  When real estate values were appreciating in the late 1990’s and the 2000’s, values of California homes were appreciating at a much higher pace than the rest of the country.  Then came the Great Housing Bubble Crash of 2008 and homes in California went plummeting down like never recorded in history. California, in general and historically, always had higher property values than the rest of the United States.

Bankruptcy Rate In California Was Among Highest

The Great Recession of 2008 really affected California citizens.  California home values were and still is one of the highest in the nation.  The real estate and credit meltdown of 2008 was the cause of many company shutdowns in California which left  hundreds of thousands of California workers out of work and scramble to look for other jobs. Many California workers tried tiredlessly to find work to no avail.  Other California workers had to settle for jobs that they were overly qualfied for and take on menial jobs. Many successful California business owners had to shut down their businesses they had for decades not just because of the slow down but because many lending institutions eliminated bridge loans, business loans, and other forms of capital loans in order for them to operate.  Bankruptcy rates in the state of California was one of the highest, if not the highest, in the nation. Due to the sluggish California economy, even the whole state of California was in the verge of bankruptcy.  Bankruptcy rates in California soared to the highest rate in the history in the state of California.

Foreclosures In California

California was one of the hardest hit states in the United States when the 2008 Great Recession started.  Home values in California came spiraling down in every county in the state of California. There was no area in California that was not affected by the 2008 Real Estate and Credit meltdown.  Some counties in California had real estate values drop more than 50%.  Many California homeowners were sitting on homes that had mortgage balances higher than the values of their homes.  Others had teaser rate negative amortization mortgage loans where the inital mortgage payments were very low and when a certain time period passed, their mortgage payments doubled or tripled and could no longer afford the new adjustable rate mortgage payment and ended up defaulting on their California home loan.  Due to loss of jobs or loss of business and the Great Recession in California, many homeowners could no longer afford their homes and had to turn their keys in to the bank or do a short sale or deed in lieu of foreclosure.

California Home Loans With Bad Credit

The economy and real estate market in California has since recovered, although not a full recovery.  Many homeowners who had a foreclosure, deed in lieu of foreclosure, short sale, or bankruptcy can now qualify for California home loans with bad credit.  Home buyers seeking California home loans with bad credit and go to their local banks, credit unions, or local mortgage company and are told they do not qualify, do not give up.  Many banks, credit unions, and mortgage companies have lender overlays.  Mortgage lender overlays are lending guidelines that surpasses the minimum federal lending guidelines where the individual mortgage lender can impose on the mortgage applicant.  For example, many California mortgage lenders will have minimum credit score requirements of 640 FICO for applicants seeking a home purchase loan.  However, the minimum FHA lending guidelines with regards to minimum credit score is 580 FICO.

Credit Scores Requirement To Qualify For California FHA Loans


You can qualify for a FHA loan with a 580 FICO credit score with a mortgage lender that does not have an investor overlay but not with a lender that will have overlays on top of the minimum federal lending guidelines.  Another common overlay set among private lenders are debt to income ratio overlays.  Maximum debt to income ratio requirements on FHA loans is 56.9% DTI.  Many FHA mortgage lenders may cap the debt to income ratios to 45% to 50%.  When shopping for California loans with bad credit, make sure that if you are told that you do not qualify, ask them why and if they have their overlays.  If you have any questions and need a California home loan with bad credit, please contact me at or call me at 262-716-8151.

Related> California refinance mortgage loans

Related> California home loans

Related> California mortgage loans

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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