The government purchasing bank stock and the rescue plan will free up more credit and perhaps have an effect on mortgage rates, incoming chairman of the National Mortgage Bankers Association David Kittle said.
"How that particular rescue plan has affected mortgage lending on single-family residential mortgages, we hope that it will drive rates down," Kittle said.
Banks have never stopped lending, but financing is now what it was back in the 1980s. People have to qualify; they need at least 20 percent down, a good job, good credit and the documentation to back all that up, Kittle said.
"Houses are still moving in San Francisco," realtor Suzy Reiley said. "They're still moving; it's taking a little longer to close because of the requirements for lending."
Looking into the future of the housing market instead of looking into the past makes Kittle, who has been a mortgage banker for 30 years, optimistic.
"We should see by the end of the third quarter next year, around August or September, we should see things getting better," he said. "I think we're very close to the bottom by now."
By then housing prices could stabilize and perhaps even begin to rise. As for foreclosures, banks can help homeowners in trouble if they contact them as soon as possible, Kittle said.