A quick review – who “decides” what mortgage interest rates should be? The short answer is – the investors who buy mortgage backed securities on the secondary market. Unknowledgeable people say “greedy lenders” (I’m being generous with the word “unknowledgeable”. Privately, in my rants and raves, I categorize individuals who love to speak so generally as misinformed? Ignorant? Stupid?). Read the rest of this article »

Dinosaurs live! Humor aside, we really haven’t seen a lot of FHA (Federal Housing Administration – a department under HUD) loans in Ventura County since the 1990s, simply because their loan limits were below what homes were selling for. We used to see a lot of FHA (and VA) loans in the 90s for a number of reasons – low down payments, flexible qualifying, straight forward 30 year fixed rate interest rates and the like. Read the rest of this article »

This morning the Federal regulator for Fannie Mae and Freddie Mac made capital requirement changes to those two companies that will (hopefully) allow them to substantially increase the amounts of $$ they can lend to us homebuyers. (See announcement).

Why is this announcement important? Because it helps bring more liquidity to a stopped up/plugged up market. (See my earlier post “Does Fed’s cut yesterday affect home buyers?”)

So this is good news. It should filter down into the marketplace as Fannie and Freddie bring capital infusions into their organizations. It won’t happen overnight, but it’s a start!

The short answer is no. The long answer is yes.

If you’re an active home buyer right now, you might’ve cheered the news that interest rates dropped yesterday by ¾%. Actually, what got dropped was the interest rate the federal government charges banks when it loans them money – not you and me. Bummer.

The stock market was thrilled however, and shot up over 400 points.

Why was Wall Street thrilled? What’s that got to do with you and me anyway?

Read the rest of this article »

Driving through Burger King Friday morning for their cini-minis and coffee, I couldn’t believe what I’d just heard on KNX – Bear Stearns had just collapsed. No way! Just 48 hours earlier, I’d read in the Wall Street Journal that their CEO emphatically claimed they were strong, liquid and able to withstand the credit crisis. Read the rest of this article »