December 2007

A Look Back and a Look Forward: 2007 Illinois Mortgage and Real Estate Market Predictions for 2008

2007 is almost over. Good riddance. It’s been a turbulent, crazy, chaotic year in the real estate and mortgage industry. This was the year when it all hit the fan. The real estate market slowed down and home prices stagnated or fell. The sub prime mortgage sector imploded and hundreds of wholesale lenders went out of business. The sub prime virus became a credit crunch, infecting the biggest conforming mortgage lenders. One top 10 mortgage lender bit the dust, and some of the biggest names hung on by the skin of their teeth. The costs of getting a mortgage went up, especially for those with good, but not great credit . The cost of a Jumbo loan moved up sharply and still hasn’t recovered . We saw a return to more traditional underwriting. Income verification is now the norm. Good credit  and down payments are now expected, too. Foreclosures and…

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Illinois Mortgage Rate Weekly Update

It’s time again for the Illinois Mortgage Rates and News week in review, my take on the week’s financial news and how it affected Illinois mortgage rates. We are still in a bi-polar market with no consensus on whether our biggest problem is a rise in inflation or the fear of a coming recession. The big news this week showed how world events can move the mortgage market. Add in the Christmas vacation slowdown and it was another roller coaster week in the mortgage backed securities arena. It is Holiday time and most of the bond traders took the week off. That meant the markets were thinly traded. On weeks like this a small volume of buying and selling can move the markets in a big way. The week started out following the trend from last week with mortgage bonds falling and interest rates moving higher. The expectation was that…

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Chicago, IL -List of Things To Do Before Buying a Chicago Area Home

Are you looking to buy a new home this year? If you are, planning ahead will make the process easier and less stressful. To make sure that you make the best decision there are several things you should do before you even start to look at houses. Here’s a to-do list for buying a home: Check your credit – Having good credit is more important than ever before for both qualifying for a mortgage and getting the best pricing. You can get a free copy of your credit report at annualcreditreport.com. (You will have to pay extra to see your Fico score.) Check your credit report for mistakes and potential problems. For more information on credit scoring and how to make the most of your credit, see How to Understand Your Credit and parts two , three  and four. Determine what you want, and more importantly what you need –…

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My Christmas Miracle – A Close In Parking Space at the Mall

I just finished off my last minute shopping at the mall. My family get together’s were earlier, so this was just getting some odds and ends for the kids. I hate shopping, and I do tend to procrastinate so it’s not unusual for me to be out on Christmas Eve. What was unusual was the state of the mall. I usually need to park in the back reaches, a long hike from the stores. This year I parked close and had my choice of open spaces. The stores seemed less crowded inside, too. There was no wait at the registers and I was in and out of the stores in record time. The part of Illinois I live in, Dupage County, is fairly well to do, so I can’t imagine that this is a direct reflection on the economy. People here may be concerned but it is not going to…

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Illinois Mortgage Rate Weekly Update

It’s time again for the Illinois Mortgage Rates and News week in review, my take on the week’s financial news and how it affected mortgage rates. This was another rip rocking week in the mortgage market as stocks and bonds seesawed back and forth with money rushing from stocks into bonds and by the end of the week back into stocks. It all revolves around the question of what is  happening with the economy. Is the real estate slow down and credit crunch about to infect the rest of the economy? Are we on the brink of a recession? Are we in one? Is the worst of it over? No one knows the answer to these questions, and with the trend uncertain the markets are a scary place to be. One of the things to keep in mind here is that bad news for the economy is good news if…

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City of Chicago Bond Program – a Great Option for First Time Home Buyers

With all the changes in the mortgage industry, underwriting is getting tighter and mortgage money is more expensive. With risk based pricing  buyers with lower down payments and Fico scores below 680 are getting squeezed. These buyers used to be considered great risks, but now they will be charged either a higher rate or higher fees for their conventional mortgage. Who does this affect most? First time home buyers.  As lenders pull back, many low and no down payment loan programs have disappeared. But there are still options, and if you live in Chicago, Illinois, one of the best programs is the City of Chicago Bond Program. The Government, both local and national, has a real interest in getting more people to buy homes. Because of this they have come up with programs geared toward helping low and moderate income buyers buy with special terms. If you meet the guidelines,…

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Bernanke Announces Plans to Close the Barn Door

Fed Chairman Ben Bernanke announced today that the Federal Reserve Bank will take steps to protect consumers from predatory loans by closing the barn door now that all the cows are already out. This does leave the possibility that if the cows do return they will be stuck outside and not able to get back into the barn, but Chairman Bernanke is a strong supporter of the better late than never school of philosophy. In a related story, former Fed Chairman Alan Greenspan continued his book tour with an appearance on the Today show. He announced that the slowdown in the real estate market was a big concern and the low interest rates set during his time at the Fed may have contributed to the bubble. He also acknowledged that his endorsement of adjustable rate mortgages and non-traditional types of financing may have made it worse. While the problem we…

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Chicago, IL – Are You Really Ready to Buy a Home Now?

  Chicago, Il – I got a call the other day from a couple who were anxious to buy a home. They  had been referred by a Realtor and he was anxious to sell them a home, too. They had heard about a first time home buyer program and wanted to see if it would work for them. I talked with the wife and I went over my normal list of questions. When I pre-qualify someone for a mortgage, I ask them all sorts of things about their job history and financial situation and where they see themselves down the line. My goal is to find out how they will best qualify for a mortgage, and what the best way is to help them meet their goals, both now and in the future. In my conversation with this prospect some of the answers didn’t quite add up. I followed up…

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Illinois Mortgage Rate Weekly Update

As this week comes to a close, it is time again for the Illinois Mortgage Rates and News market and mortgage rate update. I want to emphasize that I am not an economist or an expert on the financial markets. What I am is an Illinois mortgage guy who follows the markets closely. The big news for this week was the Fed cutting short term rates by .25%. The suspense going into the meeting was not on whether they would cut, but on how much they would cut. Wall Street, looking for a big move to bail out the big banks, was hoping for a half percent. When they didn’t get what they wanted they threw a fit. The next day the Fed tried to atone for their failings by announcing they were working with a consortium of European state banks to throw extra money to those banks in need….

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Say it Ain’t So, Roger, and Barry and Miguel and … Major League Baseball and the Mortgage Mess

It’s no surprise that some Major League Baseball players used performance enhancing drugs. Anyone who saw the way that Barry Bonds looked when he first came into the league, and then saw the cartoon character he became later, knows he was juicing. The same thing goes for Sammy Sosa and a host of others. Today the Mitchell Report, a congressional investigation on the use of steroids in baseball, was released and it named 80 players who used steroids, human growth hormone or other banned substances. (Sammy Sosa wasn’t listed, but this has to be an over sight.) The list of players included the full range from Hall of Fame bound superstars like Roger Clemons, all the way down to utility players who wouldn’t make the cut on your fantasy baseball team. Some of the names might be a surprise, but any casual fan knows that baseball has been crooked for…

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