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 Here are some upcoming changes to ruin the real estate recovery we've been enjoying:

1)  The feds are set to stop buying Mortgage Backed Securities at the end of March!  They had spent 1.4 trillion dollars buying these securities by the end of 2009.  Since no one else has an interest in buying MBS's, it's almost a fact that interest rates will rise. At a recent economic conference, the fed's did word things in such a way that suggests that they will be watching for interest rate increases.

2)  Fannie and Freddie have now made a woman's income unusable if they are on maternity leave.  Supposedly, they don't believe that the woman will return to work once they give birth!  Sounds like major discrimination to me!

3)  The $8000 tax credit will expire for people that don't go under contract by the end of April.

4)  Starting April 5th, FHA loans will have the upfront mortgage insurance premium raised from 1.75% to 2.25%

See you next time!

Kemper Lewis / Certified Mortgage Lender

720-434-3943

klewis@denverhomeloans.com

Wednesday April 1, 2009

It seems as though the American public is oblivious to what's going on with our economic stimulus plan.  Nobody seems to care about what happened with the 1st 850 Billion dollars.  We hear reports that it's hard to figure out.  If I did that with a couple of thousand dollars of my clients money, I would be doing hard time.  A couple of Billion dollars, oh well!

Let's take a look at the remedy for the "toxic" assets that banks are holding.  Have you been paying attention.  Here is a simplistic explanation of the process.  Under the current remedy, the government is going to pay for 10% of the "toxic" asset and the banking institution will pay for another 10%.  The Government will than acquire the toxic asset and guarantee the remaining 80%.  That's us folks!  The tax payer is going to guarantee the performance of the toxic asset.  What is a "toxic" asset.  It's subprime guys.  All of those folks that had horrible credit were given loans.  So to remedy this, in the infinite wisdom of the government, we are going to acquire that asset and guarantee the performance of a loan taken out by people with horrible credit.  This in the hope that the banks will loosen up credit and start loaning money.  I don't know about you, but I haven't seen any banks loosen up, quite the opposite they are still tightening up.  Have you see any "stated" income loans for people with excellent credit lately? 

Now here's the crux of the situation.  Why guarantee the performance of a "toxic" asset.  With all the money that's been spent, wouldn't it make more sense to use the money to reduce the monthly payments for these homeowners.  We already know that they can't make their current payment.  Why not get them into payments that they can make?  Are you aware that all of the Billions (Trillions) of dollars spent, that we could have paid everybody's mortgage off across the United States.  Now wouldn't that have been an economic stimulus.  I know for one, that if I didn't have a mortgage, I would be out spending away!

See you next time!

Kemper Lewis - Certified Mortgage Lender!