Which way will rates go in 2009? Given a pervasive uncertainty means nobody is buying much of anything and home values keep plunging--how do we stop this merry-go-down? For starters, the Fed, the Treasury, the Securities and Exchange Commission and all the Kings Horses being trotted out to bolster confidence and not a moment too soon!
Low Now: OK, rates look great right now. Can they go lower? Unlikely. The jury is out on how long it will take to come up with a viable, actionable recovery plan and how long that plan will take to start working. Meanwhile, help for overextended borrowers who have Fannie Mae and Freddie Mac loans is a good start. Not perfect but a start. Naturally, those banks will benefit first. Fine. Somebody needs to get a leg up and over that horse and get it going. Ideally the fittest of our institutions will recover and live to lend responsibly again. Most of our better lenders are lending. They are just very, very picky.
Expose: Check out this MSNBC video series about the Mortgage Backed Securities and related Bonds, representing the so called risky loans. The interesting part is how the ratings companies who rated these bonds 'assumed' all was well. The video portrays one underwriter who refused to underwrite bad loans and later went to work investigating for the Wall Street investors and even they turned a blind eye to her warnings!
SO---while Fannie Mae/Freddie Mac/AIG and the Banking Industry all taking their lashings behind the woodshed, their public faces belie the real injury to their pride. Like good corporate soldiers the banks still standing are still lending money, albeit under MUCH tighter guidelines and MUCH more thorough oversight; tight lipped but getting on with it. No wonder our ability to borrow money at favorable rates is, well...something of a privilege these days! So if you are in a position to buy, borrow, refinance or invest...consider yourself very fortunate and do your own due diligence. From where we stand, it's a pretty great time to be investing in real estate. You've got to have nerves of steel to be investing on Wall Street right now and real estate is returning to favor with folks who have been on the sidelines.
OH, and what about that 'Rate Forecast"?-- get 'em while they're HOT!
Happy Spring! Loannetter
510-MB-24707-50145 An approved Conventional, FHA/VA/USRDA and Reverse Mortgage Broker
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