Tight money: DQ sees 'little or no money to lend'

A couple of follow-ups on DataQuick's monthly reports on home sales, both here and in the Bay Area:

DataQuick President John Walsh made an excellent point Wednesday that often gets lost in day-to-day coverage lately (mine included) of the housing meltdown and the government response to it: Credit is extremely tight. Walsh: "Policy decisions about underwriting don't really mean much if there's little or no money to lend. Even some very well-qualified households aren't getting mortgages these days, although this could all change fast if liquidity comes back."

Another way to put what Walsh said: The Fed's move this week to limit "shady" mortgage lending is somewhat irrelevant to today's market; it's a crackdown on some loan products that don't exist any more. Yes, it's probably the right thing to do, but it doesn't have much effect on the mortgage market as we know it today.

One more from DataQuick worth noting: In today's report on home sales in the Bay Area, DQ sees signs that California's coastal market is weakening. "Credit remained tightest for potential high-end buyers on the coast, where sales were generally anemic and prices showed signs of increased erosion, the real estate information service reported. .... 'So far it's been mostly the inland areas where prices have dropped enough to rejuvenate sales,' Walsh said. 'Our latest stats might be signaling greater price reductions on the coast, where sales have been severely restrained by several factors: higher prices, tighter lending guidelines, inadequate liquidity for jumbo mortgages and depreciation in inland areas that's left homeowners there with less equity with which to purchase a home on the coast.' "

-- Peter Viles
Comments? Thoughts? E-mail story tips to peter.viles@latimes.com.

Photo: Bloomberg News

Comments

[Cal]

LilarLA:"I recently applied for a loan just to see what I can get and I was approved for a $250k loan without any problem. Of course, I had $90k in down payment and income over $75k."

I've seen comments like this on several different boards and it a breath of fresh air.

Imagine being approved for a loan in line with your income.

For those sellers and RE agents out their expecting a recovery anytime soon you have to ask yourself how it will happen.

I notice more and more discretionary sellers pulling their homes off the market (I'm guessing at the advice of their agents). If they are doing so to wait for better times they are making a huge mistake. Real prices (inflation adjusted) won't be in this ballpark again for a very long time.

[Samuel]

The only reason any loans are being being made now is due to the government sponsored entities loaning money. Without them 90% of mortgage money would dry up. Socialized finance really pays off.

[rwh]

Credit is available. I was recently approved for a $250,000 loan if I could put 20% down. Unfortunately that means I'm not going to find much of anything decent for a family of four to live in, so even though there are many eager sellers out there, I'm certainly in no position to buy their homes, possibly ever, since I only make around $80,000 a year. LA is definitely only accessible to the wealthy.