We had a program recently on the Frank Dodd Act and how it will affect the housing market.
On January 10, 2014, the provisions kick in where borrowers can sue lenders when they start to foreclose for not doing due diligence by giving them a loan when they couldn't repay it. Now who in their right mind thinks investors are going to give people loans if they can sue them when they don't pay them back. I'm sure due diligence is done when a loan is made, that's what underwriting and loan approval and qualification is all about, but if a person is a deadbeat or a person runs into bad times like health problems or job losses, a lender has no way to prevent that.
It is believed this will make getting a loan VERY VERY hard, and we may see a slow down in loans. We may see realtors changing jobs. We may see few people being able to buy a house.
Should the FHA loan go away, we could see conventional loans requiring 20% down for a loan, and the end of 30 year loans.
So in summary, if you want to buy a home, do it before January 10, 2014.
