WHAT’S HAPPENING TO THE MORTGAGE MARKETS? (Sept. 18, 2008)
On the positive side, Freddie Mac reported that 30-year fixed rate mortgages fell this week for the 5th consecutive week. According to the Mortgage Bankers Association (MBA), lenders saw a 58 % surge in mortgage applications since August 15th, led by a 122 % surge in re-financing applications. Fixed-rate mortgages are currently the predominant choice (95 % of all new applications) among home buyers. Applications for adjustable rate mortgages (ARMs) have fallen by almost 50 % since the end of last year.
After the government takeover of Freddie and Fannie last week, rates came down substantially (by almost 1%). We are now experiencing very low 30-yr rates (similar to 4 years ago). Definitely a great relief for potential buyers, and a great opportunity for refinancing higher interest loans.
On the other hand, there are a multitude of negative factors affecting the eligibility of buyers to get a loan. The Downpayment Assistance Programs (DAPs), that allowed 100% financing, are disappearing as of October 1st. Mortgage insurance rates are going to be drive (upward, I imagine) by credit scores. And lender underwriters went from one extreme (you just had to fog a mirror to get 100% financing three years ago), to the other (demanding an overwhelming amount of information and questioning issues that verge on the ridiculous for event low LTV loans).
So, on one hand we have great interest rates that should drive demand for housing up. On the other hand, it is difficult to qualify for those loans.
Where are we going? This is my crystal ball: I believe lenders will finally realize that they are in the business of lending money, not just in the business of avoiding losses. If they make it very difficult for buyers, their lending business will die. So they will probably start to relax their guidelines and requirements a little next year. I also believe that inflationary pressures are evident, and when inflation goes up, it affects negatively the stock and the bond markets, so I believe we’ll see mortgage rates creeping back up after the presidential election.
The next six months will be a great window of opportunity for buyers and investors who wish to buy inexpensive properties and get low interest rates. Beyond six months, it is hard to say… In the long term (4+ years), I believe real estate will prove that it is still one of the best and most stable investments around (look at the S&P 500 roller-coaster this week!) | 
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• Nov. 5, 2008 - RE: What's Happening in the Mortgage Market?
Through the globalization in the third world generation there are a lot of the competitive in many aspect and especially in the field of economics.
The World Series wrapped up this week, with the Philadelphia Phillies capturing their first pennant in almost 30 years. 1980 was the last Series to feature the team, and at that time they had some all time greats, like Mike Schmidt, Steve Carlton, and Pete Rose, one of the only two members of the 4,000 hits club. (The two men of that distinction were both of great renown, and of greater infamy; the other being Ty Cobb.) Since the victory over Tampa Bay, the city of Philadelphia has been elated but nervous. Philadelphia’s authorities have been on high alert, watchful for the potential of mass rioting in the wake of victory, especially at Temple University. The Dean of Students, Ainsley Carry, promises both scholastic and criminal penalties for any celebration beyond normal bounds.
Is all this really necessary? Are they so bored in Philadelphia for something to do that they’re willing to repeat Tiananmen Square to make sure everything stays Leave It to Beaver swell?
Well, if you feel like rioting, take a second to breathe. Be calm, and do not rampantly destroy property and behave violently. If you feel the urge to social injustice, please do not take drastic action. If you feel like rioting because of a recent cash crunch, take a look at our website. You can get affordable, easy personal loans with almost no effort beyond a few clicks of a mouse.
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