Great news! Investors are hungry for subprime mortgage bonds and are lining up to buy them from the Fed. This will heal the housing market because:
The Fed holds billions of dollars of subprime mortgage bonds which nobody wanted. Investors hungry for higher returns are awaiting the Fed to auction subprime bonds which in turn means that banks are more willing to begin offering more risky loans that are not purchased by Fannie Mae or Freddie Mac aka "Non Agency".
Fannie Mae and Freddie Mac overreacted to the housing crisis by tightening lending standards to all borrowers including those with excellent credit and plenty of assets.
This is a shot in the arm that the real esate market needs. With more financing options available more buyers could obtain home loans. Some of you may be thinking that riskier loans will spur another housing crisis but I disagree.
Common sense underwriting may come back but I don't see any lender willing to take on wreckless underwriting. All of the financial reforms will make a big difference.
Unemployment is dropping and the Fed is expected to raise interest rates next year. If you have an adjustable equity line of credit and have the option of either paying it off or getting a fixed rate I would do it before years end because the prime rate will be increased.
Good news is our economy is continuing to shows signs of a comeback but higher mortgages rates are inevitable. Read more in this Yahoo article.
How to Shop Mortgage Rates
View this in 1080 HD by clicking next to "CC" at bottom
North County
*1902 Wright St 2nd floor Carlsbad CA 92008
New Office!
5360 Jackson Drive #220 La Mesa CA 91942
Nevin Williams NMLS #69651
*Not a licensed office location
Fast - efficient - competitive
www.SanDiegoHomeAndLoan.Info
Sub prime mortgages making a come back?!? Oh wait that's right, it is April Fools Day
I'll bite. Good news is what we look for, April 1st or not. The LO compensation snafu is on hold to. Next the sun will come out. Yahoo is right.
Julie - I changed the title. This is not an April fools joke.
Glenn - This is great news for our industry
This is certainly good news Nevin. I read about it in the WSJ yesterday and the return of liquidity is a very positive event.