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Originally Posted by Ghoulish Delight
Or the other way to look at it - you actually have to be able to afford a loan to get it.
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No, that isn't necessarily the other way to look at it. If the credit markets seize up sufficiently then it could easily get to the point that regardless of whether you can afford the mortgage there won't be anybody looking to lend. Or rather, the house will get cheaper but the debt servicing will get more expensive.
I don't know how far we'll go down that path and a lot depends on the nature and success of whatever bailout plan is eventually passed, but ultimately that is what they are seeking to avoid. Not so much individual corporate failures. That is the collateral damage.