I am on vacation, driving around Michigan. There are For Sale signs everywhere. Three per block in many areas. It is very unusual to pass two blocks without seeing a For Sale sign. And the real problem hasn’t even started to hit yet. The “resetting” of adjustable mortgages has only just started, and the credit crunch – making it harder to get a mortgage – is only a few weeks old. And, of course, prices have not even barely started to fall to where the average person can afford to buy an average house. They will, because they have to. The next couple of years will be very hard for many people.
Some of the stories in the news: Slowdown Restricts Access to Home Loans,
The dream of owning a home is fading away for many Americans with less than stellar credit.
A growing credit crisis is prompting lenders across Massachusetts to cut back suddenly on new loans, making it difficult for even creditworthy borrowers to get mortgages and causing some home sales to fall through at a time when the housing market is already slumping.
Ripples from the subprime mortgage meltdown are spreading, affecting even borrowers with stellar credit and making popular home equity loans tougher to find.
The latest example: A major national lender stopped approving new home equity loans Monday.
More and more lenders are yanking away loan programs and changing borrowing guidelines as they struggle to please bond market investors, who indirectly provide financing for the nation’s mortgages.