Subprime Market Implodes

Are you curious about all of the press that the sub prime mortgage industry has received lately? Well if you are not, you should be. There are changes coming that will impact nearly everyone at some point.

Most of us in the real estate industry have been expecting this debacle, but there are not too many insiders who know what to expect next. The results may become easily predictable if we take a look at similar scenarios in the past. We can expect to see the mortgage industry face the same sort of legislation and government control as the banking industry experienced after the Savings & Loan bust just a few short years ago. That's right, the government will regulate our industry a little more and those companies performing well will feel pressure to tighten guidelines and further make it difficult for people to qualify for mortgages.

Most would say that this constriction is good and well deserved. I would agree for the most part, but I also feel that this will negatively affect some borrowers unintentionally. There will be borrowers who will not qualify for homes under the new restrictions when their current credit profile is stronger than thousands who bought homes within the last ten years. There will far fewer financing options available for self-employed borrowers, and for those hoping for an easier loan process with less paperwork, forget about it.

The winds of change are blowing strong, let's hope they don't blow down the entire real estate market.