Leave it to the government to take a crippled housing market (which they helped destroy) and make it worse by prolonging its recovery.
Regulators have taken a loose and passive role watching the housing bubble inflate. Now, true to their nature, regulators are making the problem worse with their slow response and lack of real-world solutions.
Real estate investors, in my opinion, have been unfairly squeezed by the ever tightening underwriting guidelines. We are dealing with larger down payments, higher credit scores, larger cash reserves, and lower debt-to-income ratios.
As a real estate investor, Fannie Mae and Freddie Mac require you to have a bullet proof credit profile to even be considered for financing. When you consider that investors put up a larger down payment than most home buyers, require better credit, and typically research and buy investment property with a cash-on-cash return, lenders and regulators should be more willing to finance these solid transactions. They would also help solve the housing crisis by reducing the excess foreclosure inventory sought by rehabbers and wholesalers.
The mortgage loan limits and policies established in 2008 and 2009 will continue through 2010.
