Will 2010 be a better year for real estate? Not likely say some, yes we see a turn around say others. Who is right and why. What needs to happen to make a change? Jobs, stock market, stability, hope…or all of the above. So, they ask me….When is this mortgage nightmare going to end? When will the mortgage money begin to flow again?

Two events need to happen here.

1. New mortgage loans being issued to borrowers need to show a clean history of performance. The less delinquencies we have for mortgages taken out in 2009 and 2010 the more likely there will be stability moving forward. This means that the market must witness a good 12-24 months of good payment history for current and new homeowners. Thus, lender guidelines will continue to be tight, including the FHA (thought to be the free ride). The restrictive guidelines are helping to get quality loans but hindering any great movement in the housing market.

2. The secondary mortgage market needs to witness better quality mortgage pools, offering a comfort level to go out and buy them. When the mortgage pools reach a better quality (“A” credit borrowers with good payment history), these pools become worth something on the Street. Investors will return to purchasing these pools and so the money will move. When Wall Street and the Global Market begin to buy mortgages, the money will flow again.

Unfortunately, all borrowers are suffering through this process now. At every level of credit quality, borrowers are being put through the ringer. Those that qualify will get loans, those that don’t will have to wait. The housing market and real estate industries are suffering and contributing to the economic downturn. There are many schools of thought out there. However, talk talk talk- we just need to get through it and move forward a little smarter. What do they say? No pain….