I can’t even begin to express to readers the amount of frustration that is being felt in the real estate community from the legislation that has put a stranglehold on lending institutions. With the slow economy it is difficult enough
to connect a seller and buyer but once that has been accomplished the truly hard part begins … finding a lender willing to stick their neck out and finance the property. It is much easier to push a rope uphill then to find a lender will to jump through the obstacles put in place by the federal government.
I recognize that much of the economic problems that occurred a few years back were the direct results of lenders being overly aggressive in their lending practices. However, in a knee jerk reaction the current administration quickly put together rules that basically closed down the lending business. I have had lenders tell me they are afraid to make a loan out of fear that the government will impose fines if in the governments subjective opinion
the loan should not have been made. Such fears make it hard for a buyer to find financing without sourcing dozens of lenders.
While I’m only personally familiar with the trouble that the real estate industry is having with access to loans I’ve had conversations with friends who own businesses that depend heavily upon lines of credits. They have told me that lenders aren’t renewing their line of credit and that sources have dried up. Without a line of credit to even out cash flow these businesses have had to reconsider the type of projects and customers they can take on. Ultimately, staffing is then reduces as these businesses downsize.
Obviously there are other ingredients that cause a recession and slow down recovery but I believe the banking regulations currently in place have adversely impacted US businesses and the nation’s ability to recover from this extended recession. When I see the political commercials that the current administration is airing it is obvious that they disagree with my assessment and are encouraging voters to re-elect them so that the banking regulations stay in force. In November voters will have the opportunity to decide the fate of the nation’s economy by either staying the course of the last 3 ½ years or changing direction and rescinding some of the banking regulations. It is easier to push a rope uphill then it is to get a politician to change their position on an issue so it is up to voters to make that decision for them.