Fannie Mae and Freddie Mac are aggressively returning bad loans to the banks that originally made them. While this certainly makes sense, it is not going to help the housing market. This will only continue to make it more challenging for sellers because the banks will continue to tighten their standards.
I attend many various real estate meetings with Realtors, investors, and consumers and there is almost always a universal self righteous attitude that of course we should expect banks to want tighter lending standards. I’m not arguing against that, but I can tell you that every time that happens, that just means further pricing pressure on sellers because there will be fewer buyers able to get a mortgage.