How New Lending Standards Have Impacted The San Clemente Real Estate Market
This article titled “The New Math of Lending“ explains why current lending standards are tight as credit is a very scarce commodity these days, not just in real estate. Banks are effectively pricing many individuals out of the market with increased fees, interest rates, and down payment requirements due to the huge losses they have been incurring. By doing this, they are preserving their capital to survive another day and are able to charge increased fees due to less competition in the marketplace. As an expense to the San Clemente real estate market, the potential pool of buyers has decreased as many buyers on the border who would typically qualify, even before the predatory lending days, are not qualifying as banks are requiring better credit scores and higher down payments. Luckily, the passing of the Housing Bill, which involved the recapitalization of Fannie Mae and Freddie Mac and incentives to first time buyers, should hopefully return credit to the marketplace and in turn lending standards should return to normal once markets stabilize.
