Lenders have made purchasing and refinancing a home almost impossible. The real estate industry has designated this cycle as a “buyer’s market” and a “tough” market for refinancing…but it’s not a buyer-friendly market. That is questionable. Why are the lenders making it so tough to purchase or refinance a home? What should be done to relax the lending guidelines? Here are some thoughts and steps that could make the buyer’s market more buyer-and-user-friendly.
1. Let’s make a megadeal with the five major lenders – Bank of America, JPMorgan chase, Wells Fargo, Citigroup and Ally Financial (aka GMAC) – to settle the state and federal civil foreclosure claims filed against them. Resolving these claims will free up their time, expense and restore their good-will and intent. Hopefully, this will allow the lenders to relax their lending guidelines so that more buyers will qualify for mortgage loans and make it a buyer-friendly market. This may not be the panacea but surely viewing the present stagnated economic position is not the answer either.
2. Extend unemployment benefits to allow existing homeowners to stay in their homes to reduce the 11% vacancy rate that exists across the country. Vacant homes will always cause more destruction to the physical property as well as the communities where it is located.
3. Continue to keep interest rates low until the real estate economic recovery can be seen.
These steps along with the stalled process of foreclosures, that will create an ever-more declining real estate market, should cause the lenders to relax their guidelines to produce a buyer-friendly market:.
Although the real estate market has taken a paralyzing affect on all industries, there is still room for overcoming major disasters. This is an opportune time for anyone to take advantage of a real estate market that will thrive even in devastation. If you have cash or equity capital, this maybe an excellent time for you to take advantage of purchasing properties at discounted prices and hold until the market recovers. Be sure to do your homework and research the potential income the property will reap in the long term. Should you decide to invest in real estate, most properties will debt service itself.
Now is the time to invest!