Many real estate buyers have experienced great difficulty in completing their home purchase over the last few years, due to a lender side issue other than the normal credit and job confirmation issues. I have seen many potential home buyers with credit scores over 700, and a steady employment history, get turned down for financing altogether. We can trace all of these problems back to banks and their hesitancy to loan based on current market conditions.

The Rationale

By not making loans, banks are building up a ready pool of buyers who are eager to borrow money to buy homes? By getting money from the government at for nearly nothing, banks can turn right around and loan it out to the safest credit risks, for the lowest rates, ensuring a decent return over time due to the low rates for the best risks. Even though the banks are getting to borrow money at a quarter percent, and loaning at five points plus, they are still trying to make up ground they lost in investor and customer confidence.

Doing their homework and realizing that there will be over 88 million new home buyers hitting the housing market, as reported by the census bureau, banks will be buoyed by the first time home buyers and new investors seeking to retire some day. Many changes have had to be made to the laws to allow the banks to most aggressively take advantage of the real estate industry, and that takes time.

The Best Way To Resolve This

Before banks were global corporations, the home owner would actually fund the home sale. That is right, the home owner simply allowed the buyer to pay them off over time, interest accruing of course, until the debt was paid in full. Not only is this a great way to buy property, but it may be the easiest way to sell it as well.

Let us just say you have to purchase a lot and save up the rest of the money to build it, you are way ahead of the game than if you would have borrowed through a bank. With all of the fees and interest banks charge you, plus the insurance that covers their butts that they make you pay for, you are really the one taking the risk, not them.

The simple solution is for Americans to be patient and not purchase a home until they have at least 20% saved up, then buy land. Owning the land yourself will always make building your home much easier to finance. Getting back to a frugal mindset that values cash more than materialistic possessions will help you appreciate your money a lot more, and help you grow it more than anything.

The author enjoys writing articles about boise home search & reos in boise idaho. Click on the above links to learn more about these topics!

With defaults on the rise JP Morgan is apparently hearing the beat of a different drummer, as illustrated by their recent announcement that they will be hiring over 1100 new loan officers this year. JP Morgan should be a familiar name to you since they are the Wall Street bank who used taxpayer dollars to acquire Washington Mutual for pennies on the dollar when the real estate market started crashing. Ringing a bell yet? Pretty sure it helped out.

After wrapping up the WAMU purchase, they then turned their cross hairs on Bear Stearns, after former Goldman Sachs leaders Ben Bernanke and Hank Paulson decided they were not worthy of receiving bailout funds.

JP’s main strategy states that the new loan officers will be strategically placed across the nation and will work from local loan hubs and banks. The confusing part is the reasoning for the hiring decision. The explanation states that they can render the best service to people seeking home loans and be best positioned for when the real estate market does in fact turn around. They didn’t use those exact words, but it does communicate the point.

All of this leads you to ask exactly what are they seeing that so many other are apparently not seeing? Every week people seem to be losing their jobs more than ever before? For the majority of people, this is illogical, unless they know more than everybody else somehow.

Since I have no choice, I now have to make my succinct point. The banks have been working diligently to under mine American homeowners and buyers, by holding back on financing real estate transactions to create a market surge that they can ride for higher profits.

You frequently see these kinds of confusing moves when an accounting department is trying to hide something that they don’t want divulged, but this action may signal a turn around for our national real estate market!

The author enjoys writing articles about short sale specialist in boise idaho & real estate in boise idaho. Click on the above links to learn more about these topics!