A Realistic Look at Financing

The headlines are filled with the tales of doom, gloom and disaster and there are web pages dedicated to which great lender will be the next to fall. You aren't going to find that here. Not that we shouldn't be watching out, we should. But like real estate markets around the nation, the national lending industry is in a market of correction.

Everyone participated, from the borrower obtaining loans that they could afford, mortgage professionals assisting them in getting the loans, to the lenders that funded when prudence should have indicated that they were not necessarily the best investments. Let's face it, everyone played a role and assigning the blame at this point isn't productive. Assigning blame is the way we avoid dealing with things and this needs to be dealt with.

So what should we do? We move forward. We get realistic as buyers and borrowers about what we can afford. We become responsible as mortgage professionals and focus on the borrower's ability to repay as a primary goal. We are cautious as lenders, and underwrite loans based on long term returns rather than relying on market inflation to protect the loan principle.