Okay this is going to be a post where I don’t post a link to back up my statements. If I do, then you will find out more about me than I am willing to share on this site. Anyway, I read this news story about a multi-use development that includes condos. The price of the condos go from some that are for low income buyers to some that are in the $500,000 range. What was interesting about the story was that they noted how many condos had been under contract and said that about 30% had fallen through because the buyers had probles securing a mortgage after the problems on Wall Street. I can’t believe that that many people really were unqualified for mortgages but got them. I figure a few people may have bailed on their own, but that many people now can’t qualify for loans. I didn’t get the feeling that it was due to losing jobs or such that caused so many to be unable to secure mortgages. Remember also that most buyers tend to find out how much they can qualify for before they begin their home searching. But, 30% who qualified prior to the Wall Street troubles no longer qualify. So, basically we can take that number and figure that we are spending big bucks to bail out at least 30% of the population. Wow! I want to know where my bailout is since I worked hard to be able to live paycheck to paycheck within my means.
I just want to add something. I think a lot of the problem isn’t just that Congress (democrats) pushed through measures to ease restrictions on qualifying for loans. The other problem is good ole supply and demand. The builders and developers have created so many new developments that they need to sell them…the problem is that there really isn’t the demand for as much as they are building. So, the supply is huge, qualifying demand is low so unqualified demand is allowed, thus creating the big over supply we have now.