Back in March of 2009 I wrote " Credit Challenged Society", with all the foreclosures and shortsales and the like who would be left to buy. It is said that 25% of the houses are in some stage of foreclosure or not being paid as intended. The economy can not get traction with 25% of the people not viable consumers who can borrow.
The mortgage guidelines have to changed to take in account the foreclosures and shortsales that were market driven. I have been getting people who assets have been destroyed in the decline, however they are gainfully employed and have good income. At current prices they could afford to re-buy but are held out of the markets, by guidelines that stop them from borrowing by restriction. The credit scores should heal faster when a person works and pays all their other debts on time.
Fannie and Freddie should not restrict them from taking a new mortgage, if they qualify under regular income ratios. There would be many more homes and condos sold. The rental market is getting hit with high income tenants who have had their lives torn up by a bad real estate deal, not nescessarily there fault, but the fault of a failed financial experiment.
If the economy is going to get fix we must address things on a real time basis, considering the difference that have been imposed by the financial upheval created by the Clinton Administration starting back in 1999. See NY Times Sept 1999 article, President Bill Clinton insisting on lowering the credit standards for home ownership. Barney Frank who pushed lowering credit standards and caused this mess.
It takes as much effort and talent as it did to put us here to get us back!
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