Oh Come On!

The Housing Bubbles Reinflates

The Wall Street Journal details one reason new home purchases are surging: homebuilders have gotten really good at helping people with less than ideal credit secure loans. On one hand, it's great to see the housing market recover. On every other hand, can't we wait at least a decade before doing this again?

In the past two years, more home builders have offered to pay closing costs and arrange home loans through in-house mortgage operations. They have hosted free credit-counseling sessions for buyers with bad credit scores, and made heavy use of government-backed mortgage programs that allow buyers to get a home with little or no down payment. ... In some cases, that means buyers are ending up paying more than they expected for a house, raising worries that some buyers are biting off more than they can chew.

Also, with so many buyers facing past credit troubles, builders are trying to expand their pool of buyers by helping people repair their credit. Woodside Homes, based in North Salt Lake, Utah, recently started a partnership with a local credit-counseling company to help prospective buyers improve their credit scores. Joel Shine, the company's chief executive, noted that it is easy to sell to people with pristine credit and a hefty down payment, and easy to deny people whose credit is in tatters.

"Then there are the guys on the border—those are the ones we can help," Mr. Shine said. One of Woodside's sales agents recently drove a buyer from a sales office to car dealership to sell the car and unload the monthly payment.

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Justin Green

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