Risky Business-How Much For Lenders, How Much For Homeowners?

Home sales going down; foreclosures going up. Sounds like a bad airplane flight, doesn’t it? Pretty bumpy going.  But, this all leads to two key questions, says  MarketWatch’s “Real Estate Weekly.”– For mortgage lenders, how much risk should they take on? For buyers, how far should they reasonably stretch their economic resources in order to buy into the American dream of home ownership?

Steve Kerch, the real estate editor for MarketWatch says that “matching a borrower and a loan is an art, not a science.” Kersch points out that to become a first time home buyer, one must be able to have a “leap of faith” and bet their income will stay high enough in the future to make the payments. By the same token, he reminds us, “It’s probably not asking too much that we allow our lenders to take that leap as well.”

If you're new here, you may want to subscribe to our RSS feed or sign up for our real estate social network. Thanks for visiting!

Tags: borrower, buyer, home, lenders, mortgage, risk