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Not everyone is bad....

By
Real Estate Agent with Long Realty West Valley AZ RE Lic. #SA560004000

Bankers, lenders, mortgage backed securities investors lend me your ears!  Not everyone today is a credit risk. Just like not everyone in 2004 and 2005 was eligible to borrow.

With crisis always comes knee jerk reactions.  And in our current credit/financial crisis we have been seeing the lenders act as overly cautious as they were irresponsible just a few years ago.  No loan seems to go smoothly these days.  Even folks with 750 credit scores, six figure incomes, and steady employment are under the tightest scrutiny these days.

Let me say this to the lenders.  You're in the business to LEND MONEY! If you don't lend money, you don't make money. Plain and simple.

Now, I'm not saying we need to go back to the free for all days of '04 and '05.  I'm just saying that just because someone was late on a utility bill 4 years ago does not make them a credit risk today.  Loosen up the reins guys or this thing is going to continue to spiral out of control.

And for the securities backed investors who got burned by this housing meltdown, well all I have to say is, no ivestment is risk free.  With high returns come high risk.  You should know this.  As I've mentioned several times in previous blog posts we don't seem to learn from our mistakes.  Just look back at the junk bonds of the late 80's dispensed by Michael Milken and Ivan Bosky.  Sure high returns, but also high risk.  Brush yourselves off and get back in the game.  There's still money to be made.

And if you'd like more information about the Anthem, Phoenix and Scottsdale Arizona real estate markets please visit our website at:

www.ArizonaPremiereLiving.com

Comments (6)

Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life
To a large extent Jerry, I couldn't agree with you more.  The purse strings need to listen to the common sense in which they lend upon.  One extreme has turned into another....
Apr 19, 2008 06:40 AM
James Jeter
Cardinal Financial Company, Limited Partnership - Carrollton, TX
James Jeter

Jerry - Great post.  Those guys on Wall Street have basically scared everyone into thinking that mortgages are bad, regardless of the actual case.  I remember reading that option one only had a 6% default rate while they were in business.  For a sub-prime company that is LOW!  When I did sub-prime loans, I always reminded clients that they were in a TEMPORARY loan, and it was up to them to  improve their situation or they would pay for it later with high rates.  All we can do is inform and educate but it's still up to the borrower to do their due diligence to make it happen.

Jason - I couldn't agree with you more!

Apr 19, 2008 06:58 AM
Frank Rubi
Frank Rubi Real Estate, LLC - Metairie, LA
FrankRubiRealEstate.com
Jerry, say it like it is. 98% of mortgages are NOT in foreclosure. between the media and the lenders reaction you would think 98% are in trouble.
Apr 19, 2008 07:10 AM
Christopher Bonta
The Bean Group - Londonderry, NH
Realtor, Integrity and Honesty
Jerry, very well written post and you hit the nail right on the head. Lenders need to be cautious in their loan practices, but your right they are in the business to "loan money".
Apr 20, 2008 06:49 AM
Michael I. Pulskamp
Mainstreet Brokers - Jackson, CA
REALTOR, EcoBroker, GREEN Desingnee
You are so right on this! as with most of your posts! Great points all.
Apr 24, 2008 08:31 AM
Joddie Roberts
Mountain Real Estate and Property Management - Spokane, WA
Your Spokane Realtor - Spokane, WA
Jerry, I agree...it is frustrating to have good buyers that can't get lending ~ or have to go through hoops to get it.
Apr 24, 2008 08:33 AM