Lenders are dropping like flies. I do some loans and word aound my group is to check every day on one of your loans since some lenders are closing their doors and dissapearing, sometimes, right before loans are set to fund.
The trouble is that hurts the poorest people.
As a real estate investor, I'm saying "bring it on." However, most people will be drastically hurt.
Heck, it's already hurting me but I can get around the problems. Most people don't have the options I do.
The "sub-prime" market just went away a few months ago and cut out a bunch of my lenders, forcing me to rely on private money. The bad thing there is that a bunch of sub prime borrowers are now looking for private money and that makes private money hard to find. Fortunatly, I have other ways of working deals.
Regular borrowers are going to be facing the same type of crunch. If you don't have a 620 FICO, it'll be hard to get a loan. As more institutions drop out, you can watch that minimum FICO rise.
Less money will be available to buy houses so the price of houses will drop.
The fact that many neg-am loans recast this year (more set for 2009), we are seeing increased forclosures that will increase the supply of houses on the market (plus more direct downward pressure as institutions dump the houses).
House prices will continue downward until about 2010. |
