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The Real Estate Plague Nobody Is Talking About

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There's a plague on the real estate market that isn't being talked about, but I suspect it's having as big an impact on this ailing industry as foreclosures. It made the news for a while, but the government assures us it's all A-OK now. I beg to differ. Qualified buyers are finding it impossible to get mortgages.

My wife and I are not rich, but we're a good bet for a home loan. In fact, we're the very people the puritanical types like to hold up as exemplars of model citizen behavior: We don't spend much, we save all we can, and we pursue a modest lifestyle -- we don't even get cable.

In fact, we wouldn't even be in the market for a house, except our landlords keep getting into financial trouble and raising the rent or selling the property. We finally decided we'd better buy something, if we didn't want to have to move every eight months. So -- with the sun setting on the tax credits -- we got preapproved, went out and found a place well within our price range, and made an offer.

Preapproved doesn't mean much.

Suffice it to say that after several banks, two appraisals, reams of paperwork, and an incredible amount of jumping through hoops, we still don't have a mortgage. Escrow ended ten days ago, and the seller is almost insane with worry. We're about to get evicted from our current digs, and are looking at rentals again, even going so far as to fill out lease applications. Five days ago, we were one day from having the loan. Then three days ago, same story. And yesterday, and today, and it looks like we could just keep on responding to contingencies and demands until winter comes around.

I'm rubbish at paperwork, but my beloved wife is a genius with the stuff. She's a documentary producer -- even won an Oscar for it -- and she knows how to deal with bureaucracy. She has been hunting down scraps of documentation so obscure we didn't know they existed, along with signed reassurances from our accountant, past landlords, employers, and distant acquaintances that we're not grifters. The bank wants pay stubs from the time of the Edison Cylinder Phonograph through next year. She literally had to call a CPA off the golf course to deal with this. The only thing the bank hasn't demanded is a stool sample; I may send one anyway. And yet, with time running out and the urgency evident to all, there's always something else. It has become patently clear that banks are getting out of the mortgage business.

I can understand this. They lost their shirts, and our shirts, too. All those bad mortgages, signed off on no more collateral than a couple of expired lottery tickets, have left the banks extremely cautious. I would be, too. But we're the dull, coupon-clipping, cash-hoarding types everybody's demanding Americans become -- if we can't get a loan, who can? This has gone beyond caution. It's turned into a weird game.

We're fed up with it. If the bank wants anything else from us -- thumb prints, wax effigies, or a copy of the Magna Carta -- they're not getting it. We'll walk away from the deal. The seller will hang himself, and probably the mortgage broker will follow suit. Our real estate agent is used to it: according to her, 50% of all home sales are falling out of escrow -- because it's so incredibly difficult to deal with the banks. It must be a nightmare for all of them. It's a nightmare for us.

Not a nightmare like ten thousand barrels of porpoise death spewing out of a ruptured undersea pipeline; not a nightmare like Haitian earthquakes or being unemployed for two years or living next door to the Palins of Alaska. But in the scope of our relatively ordinary lives, a nightmare. The bank refuses to take our money -- and we're not the only ones.

I'm told this situation is epidemic. Vast numbers of highly qualified buyers can't get into houses, because the banks don't want to lend. We were told that crisis had passed, but it hasn't. Whenever I bring it up, there's always somebody with an equally frustrating tale. I know, I know. It's a problem everybody should have. Poor me, unable to buy a house when there are so many people on the streets. But the American economy runs on consumer spending, and the queen of all consumer expenditures is a house in the suburbs. If it's this difficult for qualified buyers to get into a house, I don't see real estate making a comeback any time soon -- and if the banks want another bailout, they can send the request care of current resident.

It probably won't be us.