A spokesperson, Dustin Hobbs, for the California Mortgage Bankers Association disputes that banks are the reason for Lending Problems. He was responding to the report that Realtors were blaming lenders for the stall in recovery. He points to high unemployment and economic instability as the problem.
I agree that those are to carry some of the blame. But in the resolution of the short sale and the foreclosure, issues the banks are front and center on the recovery problem. The banks have carried out the most outrageous rules for handling there two issues. Further, the Dodd Frank financial reform act rules are still being written. The banks are afraid to move until they understand the rules. In addition, there are the marching orders from Fannie and Freddie as well as regulations from FHA. So I guess there are many factors that are causing a problem with lending money at this time.
One banker stated that he thought the problem was the non-performing loans that are still there from the bubble leaving many banks short on capital. It is still a major problem that is not going to be fixed in the short run.