Call Me Crazy, But I Think That The Little Guy Should Be Able To Buy A Home!~

I don't get it.  Prior to the credit and housing crises', when the economy was starting to slide due to the economic policies of the Bush Administration, the stock market kept bouncing along.  When pressed as to how this could be all of the talking heads on the business channels attributed it to the strength in the housing markets.

Then it became common knowledge that the big Wall Street banks and investment houses were playing fast and loose with a bunch of new investment programs that, at least on the surface, appeared to turn garbage into gold.  We had Standard and Poors rating CDO's that contained sub-prime mortgages as AAA investment grade.

When it became known that you really can't weave a sow's ear into a silk purse and expect people with bad credit to make their mortgage payment on time, especially when their interest rates jump 4 - 7%, the bottom fell out of the credit markets and all hell started to break loose.

Now as a result of the credit crises and through no fault of most homeowners, real estate markets throughout the country are in the tank, yet the stock market is still chugging right along!  If it was the housing market that was propping up the economy then, what's propping it up now?

To make matters worse, the various lending institutions are taking steps to protect themselves by tightening guild lines and making it more difficult for even buyer's who would normally be well qualified to get a mortgage.  Most recently certain counties have been listed as "Depreciating!", which in turn is making it even more difficult to buy a home in one of these areas.

If housing is such an important part of our over-all economy, when is somebody going to step in and do something to get us out of this mess?   It's not really that difficult a situation to figure out!  Did the credit markets get carried away to the point of excess?  Yeah, they did.  But even the big boys of the industry...the Merrill Lynchs and Bear Sterns have taken their licks and even if they wanted to play some of the games that they were playing before, the cat is out of the bag and that ship has done sailed...nobody's buying their line of crap anymore.  All that said, the pendulum is swinging wayyyyy too far to the other extreme right now. 

If some guy with an 800 credit score and 20% to put down feels like buying a home is a good thing to do, call me a radical, but I think that he should be able to...even if it's in a "Depreciating" market.  If that guy has confidence in the US economy, shouldn't Fannie and/or Freddie?

I'll even take it a step further.  I think that even the little guy...the first time home buyer....the guy with a 635 middle credit score and, God Forbid......a paid collection, should be able to buy a home.

I know that is crazy talk, but if the US government can step in to bail out JP Morgan, I would like to think that they can come up with SOME kind of program that will let people start buying homes again!

R.B. "Bob" Mitchell

ValueList Real Estate Services, Inc.

Bob Mitchell is president of ValueList Real Estate Services,  St. Louis' largest discount/full-service real estate and mortgage company.  If you would like to find out more about Bob, ValueList or our flat-fee listing program, please feel free to visit our web site at valuelistre.com