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Where are we going?

Does any one have the feeling that the folks in charge may not know what they are doing? One minute we have the Federal Reserve indicating that it is going to drop their rate to banks by 75bp and the next minute they are teaming up with European banks and lending money, albeit short term, to those who packaged securities so they can get rid of some less then savory packages they were selling.

Over on the government side we have FHA stepping in and increasing the amount they will lend while asking for 2.3% down. Yes, I understand why they are doing that. Meanwhile, as I understand it, they are only looking at the credit worthiness of the buyer and not the FiCA score. The reason being is that there are errors on credit reports. Well yes, we know that but an explanatory letter to the FHA can usually solve that.

On top of all this is the fraud that was committed more so in some areas then in others. Certain groups, one of them being illegal immigrants, were targeted and became buyers of homes they could not afford. Result; when they got their first mortgage payments they walked away from the homes and more of that is going to happen.

Then lets take a look at the media. I think that a lot of reporters and papers have given us excellent reports of what is happening. The Wall Street Journal has done an excellent job. But the thing they have not done is report some of the good news and that is that mortgage rates are still low and we are still selling properties that are appropriately priced. But what we truly need right now is a plan, well thought out, that will get us out of the mess, real or perceived, that we are in.

Posted by Chris Miller on 03/12/2008 02:41 PM

Comments (2)

lehigh valley, bethlehem, easton, allentown, nazareth, federal reserve, media, loans, recession, depression

2 Comments on Where are we going?

Well written Chris. I really enjoyed the article in the Call this morning on how these days, obtaining a mortgage loan can be like shooting a moving target. In my 30+ years in this industry, I have never seen so many knee jerk adjustments to rates and product guidlines a I see these days. It would be nice to see the media unbiasedly report on the good that's going on as much as the bad and the ugly. But that wouldn't sell papers would it?

03/12/2008 02:56 PM

by Scott Geary Pennsylvania Mortgage Broker (First Choice Equity Group Inc)

I think the biggest stinker of all of this are the measly refund checks we are going to get in the mail in a couple of months. That was pure election-year politics and is unnecessary. George Bush senior took the route of leaving things alone during his presidency, and the economy turned around very healthily. Unfortunately, it turned around after the election, which left him without a second term. (I am an indepedent-leaning-democrat by the way, so I am being objective here).

As for illegal immigrants being target, I think alot of people were being targeted including African-Americans. If there are federal laws protecting minorities' ability to obtain credit, there should also be laws agains targeting minorities with bad loans. Of course, I think there should be laws protecting EVERYONE from obtaining a loan that does match the creditworthiness of the buyer (i.e. giving a subprime loan to someone who has excellent credit).

I do agree that the media is not helping, but lately has the media done anything other than sell sensational stories? I do think that soon the media will have NO CHOICE but to report that sales volume has increased nationwide in the first quarter of this year, which I am pretty confident will be the case.

03/12/2008 03:17 PM

by Sep Niakan (Colfax Realty Group, Inc)

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