Bailout or No Bailout does it matter?

The Bailout will happen and it is not going to change how banks lending practices. The press makes us believe that this will stabilize the financial world, open the gates to new loans and make everything better. While, I think that it will provide some stability to the financial world, the rest will not happen. We are not yet at the bottom, we have 6 months to a year to go.

You could ask how being philosophic about the financial world relate to hard money lending. I believe that the better we understand what's happening in conventional banking the easier it will be for real estate professionals, investors and borrowers to work together. Hard money lending can only happen if the different parties involved can find a middle ground. The other important aspect of this discussion is that the less conventional (bank) money is available the higher the demand for private hard money.

Going back to the Bailout, I believe that it will happen one way or the other. It has already started as the federal government as allowed the transfer of a number of financial institutions by gauranteing part of their debt. The BAILOUT is just another component of all of this. Currently there is a lot of political posturing. In an article i red today that the representant who are in a tight race (no matter which party) mostly voted against it. The other voted for it. So it will happen once everybody is done posturing.

Being realitic, the bailout is not going to change much about current lending practices. As banks and financial institutions have received a beating and will continue for some times, credit will become more difficult to get. For people in the hard money world this means that:
- Need for hard money will and is increasing
- Due to higher demand rates on hard money will increase
- Lender even for hard money loans will be more selective
- Documentation and lending criteria will be more demanding
- All the parties working well together is a primary requirement

Your comments and feedback are most welcome. Do not hesitate to post hear or contact me.