Major mortgage companies are beginning to falter and effect people on the retail level. CNBC reports that borrowers who have already moved into new homes are finding out that their loans will never close. Since these major mortgage companies are already scrambling to save whats left of their loan portfolio the loans in the “pipeline” are all getting pulled.

This is just the beginning of the correction in my opinion. Tighter lending guidelines are only going to force more buyers out of the market, further driving prices down. Not to mention these guidelines can end up being more of a problem than the interest rate itself. Even if rates are lowered, we now face a new issue with scarcity of credit. Less lenders in the business and tighter guidelines may be the nail in the coffin of this real estate market downturn…