Mortgage Rates Drop Again – Will There Be Another Refi Boom?

Mortgage rates have dropped significantly in the last month, down below 6%.  The common wisdom is that the Fed will drop rates again, likely leading to even lower mortgage rates.  Will this lead to another refi boom?

 Not soon, according to industry experts because the continued tightening of the mortgage lender standards.  While interest rates are low tempting the “A” borrowers, most of the alt-doc and subprime borrowers cannot take advantage of these low rates because of more stringent qualifications. 

 Also, most howeowners who are strapped to high payments have very little equity and cannot refi.  Until inventories shrink and prices start rising again, it is doubtful we’ll see a huge refi boom.

NAR, Builders Blame Media for Housing Market Slump

Both the National Association of Realtors and the National Association of Home Builders are blaming the media for negative press that leads to worsening of the market.  This argument is similar to the military blaming the media for bad news in Iraq.  On both fronts, there’s good news and bad, but how much does the negative media attention affect the housing market locally?

http://realtytimes.com/rtapages/20071121_housingslump.htm

Will Bush Veto “Anti-Predatory Lending” Bill?

HR 3915, the so-called “anti-predatory lending law” is being met with fierce opposition from the Bush administration.  Some of the most controversial parts of the bill would ban yield spread premiums and impose assignee liability on companies that securitize loans loans for sale on the secondary market.

The Bush administration is in favor of better disclosures rather than tying the hands of lenders in an already difficult mortgage market.  I agree.  Bush has not said whether he’ll veto the bill, but we’re definitiely in for a good fight in an election season between the regulators and the free-market thinkers.

http://inman.com/inmannews.aspx?ID=65233

NY Atty General Leans on Lenders

New York Attorney General Andrew Cuomo has launched investigations into mortgage lenders’ practices involving appraisals. Andrew Cuomo said that he has issued subpoenas to government-sponsored lenders Fannie Mae and Freddie Mac in his investigation into what he claims are conflicts of interest in the mortgage industry.

Cuomo said he wants to know about loans Fannie Mae and Freddie Mac purchased from banks, including Washington Mutual. The subpoenas also seek to find out how the government-sponsored companies handle appraisals.

http://www.washingtonpost.com/wp-dyn/content/article/2007/11/07/AR2007110701495.html

This is move, in my opinion, is dumb.  In an Elliot Spitzer political style, Cuomo is trying to make a name for himself, while at the same time making an already bad problem worse. Let the feds deal with the problem, not the NY AG.

Weak Dollar Could Help the Housing Market

NEW YORK (AP) — The weakening dollar has caused many problems for consumers, but it may also be providing the fuel for one unintended — and very welcome — benefit: a rally in the struggling housing market driven by foreign investors.

The theory goes that foreign investors step in and replace first-time home buyers who have been squeezed out of the housing market during the recent downturn. These new investors in turn allow current homeowners to sell and trade up to larger homes.

That will help restart owners moving up the housing ladder, a process that had been key to economic growth in recent years.

Some mortgage brokers are already seeing a boost in inquiries about buying property from overseas.

http://biz.yahoo.com/ap/071110/wall_main.html?.v=2