The proverbial crap has hittith the fan

By
Mortgage and Lending with Advantage One Home Loans
Today the treasury prices plunged causing interest rates to rise. What did this? The simple fear of tighter monetary policy globally. (London, New Zealand, and South Africa raised thier rates)

This prompted heavy selling especially from MORTGAGE players prompted benchmark rates to post their biggest one-day spike in yield in about three years. The yield climbed over 5.00% which hasn't been at this level since July of last year.

What the market is failing to understand is that these countries DO NOT have the same market status as we do. Our inlation rate is relatively low, what inflation we do have is based upon the higher price of gas, and our housing market is very fragile (currently a big drag on GDP).

If the Fed does not step in and speak to the fact that global markets do not impact our economy. Then we (real estate and mortgage professional) will be forced to deal with one on the largest downturns in home prices since the depression.

This is not doomsday, yet. The market of real estate has had to endure some very terrible things thus far this year. There are record foreclosures on the market, mostly due to liar loans (neg am), investment schemes, and stated income loans. Then the subprime mortgage sector underwent a complete overhaul in which more than 80 lenders were forced to shut their doors. And prices have only fallen a mere 2% nationally.

Now, we have interest rate concerns to deal with. Rates on average will be above 6.50%. When just a month ago (when the market was picking back up) they were around 6.00%. That's a $200 difference on a $300,000 home. Can you guess what the consumer is going to do? That's right, they will offer less for the home to achieve the same payment.

We should be questioning the Fed under some bright lights like criminals. Why have you paused 18+ times in a row while housing inventories climbed? Why did you sit on your hands when these liar loans (neg am) hit a record for originations? How do you get these positive employment figures while large plants and grocery chains close, and even more jobs are shipped overseas? Who do you really work for? 

Granted we may not like the response and the truth may only make matters worse.

Now we all want to know how do you survive in this new market. The answer.............Advertising.

We can advertise that interest rates are climbing and acting now may save you thousands. We can advertise that we have not done any of these liar loans, that we care about our clients' futures. We can advertise our expertise, and how we can find them a good deals in this market.

Comments (3)

Anonymous
Anonymous
Thanks for the Blog
Jun 07, 2007 08:18 AM
#1
Century 21 Wildwood Properties
Century 21 Wildwood Properties - Twain Harte, CA
Smarter, Bolder, Faster

it's interesting to go back and read blogs and how we felt about the market in 2007 and all the changes it has gone through to get to 2010.  Miss you Jonathan!

Sep 30, 2010 05:56 AM
Fred Griffin Florida Real Estate
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

We invite you back to ActiveRain in 2016!

    Much has changed since your last visit to ActiveRain.  I encourage you to take another look at the website. 

    Surf some blogs, leave some comments.  Better yet, post a Blog.

    Best to you!

Jun 21, 2016 08:42 PM