Yes, ladies and gentlemen, guys and gals, mods and rockers, we are going back in time with access to capital markets and lending guidelines, with loan to value restrictions on certain types of properties like condominiums, limiting access to loans that just recently were marketed and sold by the thousands. Fannie and Freddie are revising what they will not call "redlining", but include entire cities and zip codes in what they have determined, "Declining Markets", which we mortgage and real estate professionals will need to explain in Queen's English that their homes are worth what homes were worth in the late 80's and early 90's. Yes, you know I am somewhat kidding around, but there lies a half truth.
You know, I have always told my children to tell the truth, don't spin stories, and do not embellish. I would have some of my fellow lenders over my knee if they were my children. Call it for what it is. Don't go out and tell the publich that you can do 100% financing loans when you are telling us that for the most practical meaning and recent practice is to deny loans like these for "declining market value". Tell the nice man that he overpaid for his home in Las Vegas, Phoenix, Naples, or Sacramento last year, and adjustments must be made. Painting a broad brush stroke over and entire area seems a little undaunting, and we are the "Messengers", explaining the rationale for recent targeted areas of our country's real estate.
Who is the consumer suppose to trust when they buy not only a home, but what most consider a life investment? Who must now do the dirty work for the investment banking community that fueled this fire of RE speculation, zero down loans, lowering the bar for credit worthiness; and the media that stoked the coals of that blaze? How about many of us should have counseled our clients a little more diligently? After all, we are the resource for the community and it's needs for sensable real estate and financing transactions.
Bright side now, we got SPANKED, and it hurts, and it hurts a lot and lasts a long time. But we have learned Mommy and Daddy, and we will help our brothers and sisters weather the storms of foreclosure and loss, and help them back up on the feet, ready to be a little more careful the next time they need our services. Hang in there, as I hope to make it year 19 in this crazy business, and love it enough to care about the future. A new beginning.
Rick Cyngier
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