Housing prices are dropping almost everywhere especially as investors or homeowners are unable to make the monthly mortgage payment and homes go into foreclosure. Sounds like a great time to get into the market if you missed out on it before, right? Well, not so fast. First of all you have to realize that there many homes available at bargain basement pricing, but most people are not able to qualify to become investors because they don't have enough income to qualify for their current monthly obligations and the new mortgage.

As I stated in a previous post, lenders are not lending stated income/stated asset mortgages on non-owner occupied homes. So what is a wanna be real estate investor to do? Even the hard money lenders (they will lend up to 65% LTV on owner occupied) don't want to lend on non owner occupied residences. So that means that even with a large down payment (35%) investors will be unable to obtain financing to purchase these homes.

I've been selling mortgages for quite a few years and I very seldom see borrowers that AREN'T living at the high end of their debt to income ratios so most wanna be investors will not be able to use their current income to purchase an investment property.

Even investors that are already in the market are going to see their options dry up when trying to purchase these bargains. So...who is going to be buying these properties? I really have no idea. Right now it seems that most people are staying away from purchasing anything at this time because they don't think the market has hit rock bottom.

The credit crunch needs to end before lenders will feel safe lending to investors or these homes are just going to sit and sit and sit. And we know all to well what happens to neighborhoods when homes are left vacant. Money needs to be freed up so that people can purchase these homes.

No buyers in sight and no buyers on the horizon.

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