We all have a favorite old TV show.  Years later when we catch a glimpse of it on Nick At Night, we're instantly transported back to a time in our youth where good memories reside, shadowy images of a simpler less complicated existence. 

As a Realtor I get to experience this, albeit much less frequently, when I run into someone who can remember a time when the sale of their home conjures up similar emotions.  I won't say meeting one of these people is as rare as meeting a surviving Beatle, but its close.

When I'm well rested, and can focus the way back machine, I too remember this simpler time.  You'd list the house for sale, and as you exited on the way to the car, you had to carefully avoid tripping over the prone bodies of the buyers laying about the front yard, their pockets stuffed full with hundred dollar bills. 

If memory serves correct, I recall the average time on market for a Folsom home in the 2000-2004 era was about a millisecond.  Over price offers, bidding wars, camping out overnight to get a number in the new builder lottery.  Ah, the good old days for sure.  Like a Jamba Juice, loans were abundantly available in a mix of flavors, most buyers preferring the "don't ask don't tell" variety.  Appraisers used telephoto long distance lenses, aimed from their car window as they slowly cruised by rather than actually cross the threshold and walk the home they were assigned to appraise, smiling contently at the $400 large they would soon collect, all the while trying to come up with a way to shave another 5 minutes off of their demanding 20 minute work day.  Escrows sailed along in 30 days or less too.  Everyone was happy.  But one fateful day in May 2005 our market "jumped the shark", a euphemism made famous by the Happy Days episode that marked the decline of its highly successful run. 

And, like our favorite shows of yesterday, we got canceled. Welcome the new reality show, real estate-WWF style.  

Today most every home sale is a lot like a WWF battle royal cage match.  In one corner you have the unhappy seller, he walks with a limp now, scarred and beaten down from too many years of buyers and banks piling on, pile driving him into the mat till he taps out and surrenders.  Across from him is the disgruntled appraiser, his partner is the lender.  They make a great team, good guys turned bad.  Across in the opposite corner stands the current champion- aka the buyer.  Tanned and well rested, he stands full of confidence and swagger.  For years now he's been the man. He will not yield easily, reveling in his superiority, hungry still to deliver yet another beating to any seller who challenges him.  The person in charge of the show, responsible for orchestrating it all to a satisfying conclusion is the commissioner, also known as the Realtor.  

Once viewed with the respect and deference of a person of influence and standing, and depended on to turn chaos into calm, he has seen his ability to manage and control the proceedings diminish in recent years.  Now, more psychologist than facilitator, he has to work harder than ever to keep everyone happy, all the while still moving the proceedings forward. It's the new normal.  For those competing in the octagon it can be brutal, and for those on the sidelines it's must see TV. 

I guess things have a tendency to look so much simpler in the rear view mirror.  

I hope years from now we don't get to another reality where we one day look back upon this time and place and say "remember 2010...gosh I miss those Happy Days."    

Here's the Reader's Digest version of the new changes handed down:

Credit Score- with a credit score below 580 the required down payment will be 10% this is not a major change as they will not approve a score below 620

Raise the upfront financed MIP (mortgage insurance premium) from 1.75% to 2.25%  (must be approved by congress).  This is the second time in two years that it has raised the premium.

Max Seller credit lowered from 6% to 3%- this is the largest change.  They are trying to lower the over inflated appraisals where sellers increase the sales price to offset paying for buyer closing costs.

These changes are aimed at helping reduce risk in this ever continuing saga of loan defaults we find ourselves awash in.  The overall effect on Folsom home sellers is probably minimal.  Of the three changes mentioned above the seller concession reduction is the most likely the one that will from time to time rear it's ugly head and kill a sale.  Beyond that don't look for these new guidelines to significantly impact the lending side of things for our market.  

And so it goes...    

President Obama continues to place much of the blame for the recession on past mistakes made by Wall Street.  But upon a closer look, one of the reasons for the recession's continuation could very well be the "fixes" currently being made to the banking industry problems, problems that started the whole economic meltdown in the first place.

Lending institutions that used to makes loans to every and anybody are now so rigid in their underwriting requirements that many homeowners and potential homebuyers are being turned away or turned down when applying for a refinance or purchase loan.

According to Government sources, only half as many refinancing applications were reported at the end of 2009 as were reported in the beginning of 2009.  So even though the government has succeeded in driving mortgage rates down to incredibly low levels, that hasn't been a savior because so few people have been able to take advantage of the low rates. 

The lack of available credit not only hurts individual homeowners and home buyers, but it also has broad economic repercussions on a possible large scale national economic recovery because of the part housing plays in a healthy economy.

For those who currently own a home and do not plan to sell anytime soon, refinancing could save them hundreds of dollars a month, which in turn could be put back into our economy towards the purchase of goods and services.  This extra spending would no doubt improve the economy by helping build back many of the jobs that have been lost over the past 5 years. 

And then there are those who are likely to lose their home to foreclosure unless they can modify their loan through a refinance of restructuring of their loan. 

Our failure to address the problems of these people is why so many foreclosures continue to pervade our housing market.  

To point, banks are so ill equipped to deal with short sales that many eventually become tomorrow's foreclosed home.

I've maintained for years that if our government spent more time focusing on improving inefficiencies in the handling of short sales instead of other areas they've delved into we'd be a lot closer to the end of the housing recession than we currently are. 

Journalists and politicians wore themselves out chastising mortgage lenders for the ridiculous lending standards they applied over the past decade (and rightly so). But now - here comes the inevitable backlash- credit tightening that mortgage lenders (mostly FHA, Fannie, Freddie) are putting in place at a rapid pace.

And so it goes.