HLS, I agree with you that getting a loan is not as dismal as many are saying but what is dismal are the loans that are available juxtaposed to current home prices. Yes nonconforming loans will come back on the market but I can guarantee you they will not look anything like they did during the boom, they will be at much higher rates. From what i am seeing and hearing it is the underwriting of the conforming, jumbo and non-conforming loans that is experiencing the most profound change i.e they are actually underwriting the loans now. I think we all agree it is a good thing to see sanity come back into the lending industry. But there are going to be consequences. We are seeing falling home prices now and in some cases severe drops. That puts the lender in a bind to loan money for an asset that is falling in value due to the unknown reaction of the conforming good credit borrower facing a home which will be valued at substantially less than the balance of the loan. It is going to take a long time to get through this phase.
