[quote]
…Investors paying all cash for foreclosed properties buoyed housing markets for several years, but a decline in distressed sales and rising home prices have reduced those once common transactions.
…The California Assn. of Realtors last week projected that home sales in the state this year would fall nearly 65,000 short of their initial forecast, in part because of tighter mortgage lending.
…At No. 1 mortgage lender Wells Fargo & Co., Chief Financial Officer John R. Shrewsberry said this week that the standoff over mortgage repurchases has created two mortgage markets, only one of which — for affluent borrowers with well-established credit — serves borrowers well.
…The low- to middle-income and minority borrowers most often thwarted by the tougher lending standards are also the same people who were hit hardest in the mortgage crisis, said Paul Leonard, California director of the Center for Responsible Lending.
…”Those folks took it on the chin the hardest and have been least able to get up off of the mat,” Leonard said. “That’s a serious challenge in terms of building wealth.”
[/quote]
My translation of this is:
…Now that the all cash/well financed buyers have stopped purchasing their cheaper REO and short sales properties, and now that home buying is slowing
…let’s relax lending standards so people with less than stellar credit and can now take out loans to buy homes that are now much more expensive…
…so that all the people that were able to buy with cash or were well financed buyers that bought at a much lower price can sell to people that have been locked out of their purchase….
…so that people who couldn’t qualify to buy when prices were cheap can help continue to build the wealth of well financed, first wave buyers….
…as these new buyers lock into a loan for a property that is priced much higher now than before…
…so that we can continue to maintain higher home prices, with a steady pool of people that want to buy….
Cant say I didn’t see this coming eventually after the first way of buyers started to saturate…
