Comments on: When Lenders Mess Up, Everyone Suffers!

By: Dallas Homes

Dallas Homes — Sun, 14 Oct 2007 16:59:59 +0000

The rest of the title should be and they are messing up a lot more than usual now days.

By: Real Estate Investing and Marketing » Blog Archive » When Lenders Mess Up, Everyone Suffers! | Real Estate Investing for Real Blog

Wed, 10 Oct 2007 15:21:01 +0000

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Mon, 08 Oct 2007 19:14:29 +0000

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By: Rick Jacobsen

Rick Jacobsen — Mon, 08 Oct 2007 00:16:21 +0000

I think that you’ve made a fair assessment of how lenders contributed to the current state of the real estate market. Lenders did suddenly tighten their qualifications causing many of the negative repercussions that related industries have experienced. It’s unfortunate that their lending practices weren’t more tightly regulated, which would have prevented the rising numbers of foreclosures. I tend to agree that the government will likely step in and bail out lenders again… and that the lenders will likely be back to abusing lending practices before long.
What, if anything, can be done to prevent this from reoccurring?

By: Sam Chapman

Sam Chapman — Fri, 05 Oct 2007 21:10:48 +0000

The Austin, TX real estate market was very healthy until the lending mess caught up with us. We were selling homes as fast as we could get them on the market in many cases. For the last six or so weeks we have seen probably 35% of buyers drop out of the market and listings are sitting in many parts of town, especially low priced homes and ones requiring jumbo loans. It will settle out over time, but we must be one of many once quite healthy markets that got hit.

By: Colby Callahan

Colby Callahan — Fri, 05 Oct 2007 18:18:49 +0000

I do not think the government will step in to bail out lenders. I don’t think they should. The issue was not caused solely by lenders making bad loans, it was the ratings agencies and investors that were the problem. When rating agencies say this portfolio will perform as such and then it doesn’t then investors lose out on money, then lenders can’t sell to investors, and on and on. It is very important to understand where the real issue lies. The only lenders hurting right now are the ones who securitize their loans with investors. Portfolio lenders are loving it right now as conduits are falling off left and right. Here is a quote from Bernanke…

“It is not the responsibility of the Federal Reserve — nor would it be appropriate — to protect lenders and investors from the consequences of their financial decisions.”