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Credit Crunch Squeezing
Wall Street rebounded Monday after taking
a major hit last week. Financial experts are blaming
the drop on the crumbling real estate market. ABC2 Investigator
Joce Sterman takes a look at how buyers and sellers in
our area are dealing with the credit crunch that drop
has caused.
Diana Coyle is a frustrated home owner. She spent months
fixing up a house near Rodgers Forge, hoping to flip
it. She says, "We only received one offer and it
was so awful...it was almost what we paid for it. Then
we put $80,000 worth of repairs in." After listing
the home twice and even trying an auction, Diana and
her boyfriend decided to take it off the market. The
couple was simply tired of waiting. Coyle says, "It's
scary to think you're stuck until somebody is ready to
buy."
And local sellers may have to wait even longer for that
special somebody because the pool of eligible buyers
is essentially shrinking. Increasing foreclosures and
a jump in delinquencies have made lenders nervous. Experts
say the companies are now reluctant to finance every
penny of your home purchase. Instead, they want buyers
to fork over a down payment as security. Carl Delmont
with Freedmont Mortgage says, "They want borrowers
to have a little bit of skin in the game, so now you're
seeing the 100% products are gone."
The days when anyone could qualify for financing are
also gone. Financial experts say blips on your credit
report may be enough to keep you from buying what you
want. Delmont says, "Unfortunately, the people who
have less than perfect credit, they're the ones being
harmed by the whole quagmire we find ourselves in today."
But the news isn't all bad. If you've got good credit
and a bit of cash set aside, you may actually find some
bargains out on the market. Delmont says, "Now people
are begging buyers to come to their houses. They're staging,
offering money. The market has changed 180 degrees in
7-8 months."
But Diana Coyle isn't begging for buyers any more. She's
taking a break from the real estate game. She says, "It
was very disheartening, very disheartening. We've just
stopped doing anything with real estate right now."
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