Archive for the ‘Economic Outlook’ Category

Home ownership obstacles (3rd Qtr 2011)

Sunday, December 4th, 2011

Surveyed obstacles to home ownership

Source :

The Not So Perfect Storm

Tuesday, March 16th, 2010

This blog author still has a key chain that reads “Captain’s Stateroom — SS Titanic” given to him in a going away party a good while back when he was leaving Federal employment.

Roll time forward and the analogy to sinking cruise ships may be a current day fit, as the Fed’s continue to pursue their “QE2” program. (the Fed’s “Quantitative Easing” program and the cruise ship “Queen Elizabeth 2” seems to be an obvious allegory).

The author has taken to the sidelines and a lifeboat as the mortgage industry continues to flounder. That’s a poetic way of saying I’ve let my mortgage broker license go inactive. It just isn’t fun anymore putting on a happy face that low interest mortgage money is abundant and is readily available for submitting an application, when the reality is pretty much the opposite for most borrowers.

Loan originators, as mortgage brokers are now called, are generally able to offer the current under 3.99/4.25 rates on agency conforming loan amounts primarily to borrowers who are have a middle FICO score over 740 and enough equity in their home to qualify for a refinance or a large enough savings to cover their down payment and closing costs.

Except for government employees, whose credit hasn’t been dinged by the economic events of the past few years ? Whose credit score is still above the 740 high water mark?

And if your credit score has miraculously floated like burning oil on the churned up seas, whose mortgage isn’t at least partly underwater ? I have friends whose HELOC’s (home equity lines of credit) have been trimmed back severely in this period of reduced home equities.

Then to add insult to injury, if the terms of your loan application trigger any risk-based loan level pricing adjustments (LLPAs), your rate quote will most likely be higher.

Bottom line : if you do not fall into the “perfect borrower” category, batten down your hatches and stand by for the “perfect storm”. And prepare to get wet.

Loan originators find themselves shouting into the wind in this kind of economic weather, and at least this originator doesn’t find that to be productive, fruitful, or helpful to potential clients. A “perfect borrower” should be able to go into their local credit union and do just fine.

I’ll continue to post here and on my twitter blog “a1mortgageinfo” with opinion and information that I think cuts thru the chase and tries to make sense of it all.

I continue to be a strong advocate of the Reverse Mortgage Program for qualifying seniors.

Hang in there … keep your life vest inflated … and hopefully we’ll all wind up having stayed the course !

Who’s Giving Out Snorkel Masks ? More on the influence of underwater mortgages.

Saturday, February 6th, 2010

Results of a recent consumer survey conducted by Thomas Reuters and the University of Michigan indicated approximately 75 percent of homeowners who participated in the survey viewed current home buying conditions as favorable because of attractive home prices and low interest rates.

However, nine out of ten of those home owners viewed the conditions for the sale of their own home as unfavorable, not because of lack of buyers, but because of price declines.


Lenders Should Help You … Not … Walk Away From Your Mortgage

Friday, January 8th, 2010

The excerpts below are quoted from :

“Walk Away From Your Mortgage”
By Roger Lowenstein
Contributing writer for the New York Times Magazine
Published:  January 7, 2010

Time was, Americans would do anything to pay their mortgage — forgo a new car or a vacation, even put a younger family member to work.  But the housing collapse left 10.7 million families owing more than their homes are worth.  So some of them are making a calculated decision to hang onto their money and let their homes go.  Is this irresponsible?


Market Commentary – 10 Surprises for 2010

Tuesday, January 5th, 2010

I don’t know if this entire commentary has a place here, perhaps only parts of it, but for now I’m going to post it for no other reason than to archive it and refer to it from time to time as 2010 unfolds.

Mr. Wien reviews his predictions for 2009 and how they fared, in addition to laying out 10 new ones for 2010.   As he himself writes “everyone keeps score on everything”  so time as always will reveal the clarity of Mr. Wien’s crystal ball and researched opinion.

Market Commentary by Byron Wien of the Blackstone Group

Fed to Maintain Low Interest Rates into 2010

Monday, November 9th, 2009

The Federal Reserve could remove some of the extraordinary support it has extended to the U.S. economy once the recovery looks solid and monthly job growth has returned.   St. Louis Federal Reserve Bank President James Bullard said he would not favor tightening monetary policy before recovery was well-established.

The central bank, wary of undercutting the fragile recovery by withdrawing its support too soon, is also on guard for any indication that its emergency lending efforts are fueling an unwelcome bout of inflation as the economy heals.

The Fed cut the benchmark the federal funds rate to near zero last December and put in place a vast array of emergency liquidity facilities in an effort to combat the worst financial crisis and recession since the 1930s.

As part of its emergency efforts, it has bought long-term government and mortgage-related debt to try to drive down borrowing costs.

The central bank has pledged to keep interest rates extraordinarily low for “an extended period”. Most analysts expect it to hold rates near zero until mid-2010 or later.

Source :

Early May ’09 mortgage rates revisited in Sept ’09 !

Thursday, September 10th, 2009

I don’t think the market is going to let rates get much lower. Actually I’m surprised we’re seeing these again, but with continued Government intervention in the mortgage securities market for now (this too will end), it’s a crapshoot.

A simple rule of thumb, rates go up a lot quicker than they go down.

Get off your decision fence, get that paperwork in and lock in your rate.   Especially those of you that qualify for the first time homeowners tax credit !

These  “planets”  will only stay aligned for so long, after which you’ll only be able to look back and kick yourself for not making a move then.

Testing important thresholds on the eve of 9/11

Thursday, September 10th, 2009

Gold briefly topped $1000 per ounce but then dipped back below that psychologically important level.

The dollar slid to its lowest level since September 2008 as China expressed inflationary concerns about the U.S. amid more calls for a diversification out of the dollar as the sole reserve currency.

The Federal Reserve reported that consumer credit plunged by $21.6 billion in August, its largest decline on record. The decline came as banks cut credit lines and consumers continued to deleverage.

While this cycle’s current decline in consumer credit is a first, it is difficult to draw conclusions for the future – Will consumers releverage? Is the deleveraging a lasting retracement of past overleveraging? Does it indicate that the economic retrenchment has further to go?

None of those questions are likely to be answered in short order.

This crystal ball view of our near term economy is probably on target

Monday, September 7th, 2009

Perhaps the most meaningful comment in early September came from Dallas Fed President Fisher,  who spoke of deflationary concerns and sluggish growth.  He said, “for the immediate future, the risk to price stability is a deflationary risk, not an inflationary one” and that “we are likely to see a prolonged period of sluggish economic performance and uncomfortably high unemployment as businesses reallocate capital and labor to fit the new economic landscape.”

economic outlook

For anyone’s guess or comment :  how long is “prolonged” ?