It’s Already Rough in a Down Market…Now You May Not Be Able to Get a Loan

The credit crunch is at it again.  Having done a number on the financial markets and playing a good role in the demise of the housing market, it’s no doubt tougher to get a loan these days.

However, in some areas, banks are choosing to no longer do business.  The Wall St Journal reported that some banks have categorized some areas as declining or slumping market conditions.  To protect themselves from a loss, underwriting standards in these areas are so tough, it’s nearly unattainable.

While there is no mention of the bay area, folks in certain parts of South Florida and Las Vegas may be feeling the cold shoulder.  Without the ability to get financing, this adds fuel to the fire.  How is a local community that is already been beaten down on its home prices able to climb out of the spiral when potential interested buyers can’t get loans?  These higher standards appear perfectly legal, but it seems like it will just keep fanning the flames for areas that are already hot zones for foreclosures and a very weak housing market. 

Should there be some intervention here?