So the banks have been bailed out and first-time home buyers now have 8,000 more reasons to buy a home. So why did housing sales decline again in January? It’s because consumers believe they can’t get approved for credit, even with stellar credit ratings. So why aren’t the banks lending? It’s because their hands are tied by regulators who apply “mark to market” analysis to determine a bank’s health and its ability to lend. I’m sure this is a WAY dumbed down version of the system, but basically mark to market works like this: Say Joe’s Pretty Good Bank held 10 mortgages at $100,000 last year. That means that the bank has $1 million in assets tied through loans, since technically the banks own the homes. But now a year later, each of those homes is worth say $70,000, so the bank has only $700,000 in assets. So the SEC restricts the amount of cash a bank can lend based on this ratio. If the SEC would eliminate this practice, more people would have access to credit and more homes would sell. The faster existing inventory of resale homes, the faster home builders can start building again.