Damaged credit a dilemma for lenders

Part 3: Rebuilding Homeownership

While bankruptcies and foreclosures could lock millions of would-be homebuyers out of the real estate market, the long-term impacts may depend on whether lenders are willing to make allowances for previously responsible borrowers who lost their home through circumstances beyond their control.

But ask lenders if, when the economy recovers, they’ll be willing to make allowances for borrowers who may have been victims of circumstance, and the silence is deafening.

None of the top mortgage lenders contacted by Inman News were willing to provide their insight on thorny questions like whether a shrinking pool of eligible borrowers could dampen demand for homes, putting further downward pressure on prices.