Debt Consolidation Credit Counseling In Phoenix

At this present time to say that the mortgage market is in a certain state of turmoil would be the understatement of the year. The situation has gone from one where whoever wanted a mortgage could get one to a situation where it is only the people who can afford not to need one will be considered.

Because of the credit crisis restrictions on lending and borrowing have changed the whole lay of the land. Lending institutions are now giving far more careful consideration to whom they deem fit to lend their money to and as a result who they seem beyond consideration. Self certification is all but a thing of the past and where not long ago 100% mortgages were the norm in this present climate 80% loan to value mortgages are as far as the institutions are willing to go. And the main area that has suffered is Buy to Lets.

A considerable amount of the growth in the housing market over the last few years can be put down to buy to let. Indeed it is what has kept it buoyant. But this in turn has had a huge effect on the economy in general and the individual in particular. The crux of the problem has been that ordinary people have been having a go at the buy to let phenomenon.

Car auctions in the early part of the 1980s were deemed to be the bastion of the motor trade. Anyone that was not from the trade was seen as an outsider and indeed could quickly be spotted as a rube who was well out of his depth. But gradually the situation began to change and more and more people were trying their hand at spotting a bargain and tidying it up for a small profit. People from all sorts of backgrounds were giving it a go.

But experience (or inexperience) started to show and the so called bargains were sometimes nothing more than the proverbial pig in a poke. And the outcome was that these guys would get fleeced. It is an uncannily familiar situation to the one that people had found themselves in with regards to the buy to let market. Okay, the amounts of money that were changing hands were different but the point is that people were participating in a market in which they had no prior knowledge, and were buying houses that were way overpriced, in some cases without even seeing what they were buying.

Personally, I have bought several properties professionally over the last 10 years, most of which have been bought as buy to lets. Even with the expertise and professional knowledge I have, I would never buy a property without first seeing and inspecting it, and I know of no self respecting professional who would. It baffles me why a non professional would step into an unknown market and think they are an instant expert.

The effect of this careless disregard for common sense is that the market is now in the state that it is. And because these people borrowed money from institutions who would end up having to acknowledge the fact that they had taken on risky borrowers, the institutions in turn put severe lending restrictions in place. Even over the last few months loan to value mortgages have tumbled from 85% to 75%. And things may still get worse before they get better as house prices continue to drop.

What we are left with is a stagnant market in a state of utter chaos. What I would propose is that the lending institutions get together to create a buy to let product that would be applicable to landlords with ten or more properties. They would then already have the assurance that these landlords are in a position to honour the loans. It would also reap benefits for the public in general in that it would at least breathe some life into the bloated corpse of today's property market.