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Mortgage Market Update

click for larger imageThe rate markets are under pressure again this morning. The recent spike in interest rates adds more confirmation to our forecasts that the lows in the interest rates markets are now in place and rates are unlikely to fall to new lows. The recent stampede to the safety of US treasuries became excessive; the run down in rates was mostly in treasuries but mortgage rates benefited as the outlook for the US economy hit new lows in July and August. A lot of concern the US economy would double dip and fall back into text book recession sent investors, both domestic and foreign, to the safety of bonds.  There just isn't much room left for improvement, but a lot of room for rate to go up.  I would Strongly advise capitalzing while you can.

Want to know more on how the Mortgage Market directly effects mortgage rates or need an explanation of the candlestick chart above? Send us an email and we'll gladly provide an in depth article.  Realtors, ask about a detailed presentation on the Mortgage Market at your next office meeting.

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Thursday
Nov052009

FHA Bailout next...?

DateThursday, November 5, 2009 at 12:33PM

There is a good article posted today on the Fox Business site that takes an in-depth look at this question and its ramifications.  Keep in mind that virtually all new mortgages are now insured (or in the case of VA, guaranteed) by the Federal Government.  This means we the taxpayer now own them.

While FHA, has maintained a more traditional approach to their lending guidelines, they are not immune from the foreclosure phenomenon we are currently experiencing.  Congress has asked to take a look at the books to see where the FHA stands in terms of their mandated reserve (rainy day fund) requirements.  The fact that they continue to delay the report almost assuredly means they know there is trouble.

Why is this so important to us...?  FHA loans have become the salvation of the housing industry.  Over 2/3rds. of loans we are currently originating, are FHA loans.  This is all that is left "flexible" loan programs in terms of down payment and credit requirements.

The bottom line, if FHA were to make any dramatic changes to their lending practices, it would have a dire effect on a housing sector that is still trying to stabalize.  Keep a VERY close eye on this one...

AuthorLonnie | Comments Off |
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