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It's A Good Time To Buy -- But Not For The Reasons You May Think

Since November 1, the following banks have written-down at least $1 billion in their respective loan portfolios:

• Bank of America
• Barclays
• Bear Stearns
• Citigroup
• HSBC
• Morgan Stanley
• Wachovia
• Wells Fargo

This is a big deal to people in the market for a home loan because when banks repeatedly take mortgage-related losses, it can lead to major risk aversion -- even for "good" borrowers. 

It's one reason why mortgages are more difficult for which to qualify than in months past.   Banks would rather pass on an "avergage" mortgage application rather than be stuck with a potentially "bad" loan.

If banks continue down this path throughout 2008, it means that buyers eligible for home loan financing today may actually be ineligible tomorrow.  It could also mean that a home under contract may never close because the buyer's approval could be disqualified before the closing date is reached.

If you're a home buyer and your profile is not "ideal" to a bank, now may be a good time to write a contract because your mortgage options may get more thin very, very soon.