Mortgage Market Blog

Welcome to my take on the current mortgage market.  Let me begin by saying I will write 2 versions, the first will be more for the mortgage/real estate professional and the second version will be the deciphering of it, basically, it will spell it out in everyday terms.

Aug10th,_2007                                                                                                                                     Mortgage/Real Estate professional version:  The credit market generally, and the U.S. mortgage market in particular, continue to experience significant volatility. I anticipate the investment appetite of investors in mortgage assets to remain in a state of flux for the immediate near term as bond holders, portfolio managers and others adjust to the higher level of delinquencies and losses that have primarily affected the sub-prime sector, but are having ripple effects in other market sectors as well. 

In everyday words version: Wall Street investors are unwilling to take the risk associated with sub-prime loans and are now growing weary of many non traditional loans.  This "growing fear" is working its way towards all loan programs, not just sub-prime.  As with all "down times" in every business, this will pass, the question is when? Unfortunately, my prediction isn't until summer of 2008 and I will tell you why.  The mortgage industry was "giving away" the 2 year fixed mortgage up until the summer of 2006 which means that we will need to wait until the summer of 2008 when the last of those mortgages will adjust.  Once those mortgages adjust and the owners either refinance or sell those properties, the market can go back to a more traditional environment.