December 2008

Good Bye to 2008 – A Look Back At a Crazy Year for the Economy

2008 is finally at an end, and as the economy totters forward, we can say we survived a tumultuous year. That is an understatement. In my year end review of last year, I said that 2007 was the year it all hit the fan. In hindsight, the fan was just starting to spin last year. It was this year that the bad decisions of the last several years splattered all over the economy, affecting us all. This year was the year that prices of oil and other commodities skyrocketed to all time highs as the markets worried over the impact of runaway inflation, before crashing to historic lows as deflation became the watch word. This was the year that the stock market hit the skids at the same time that house values deteriorated throughout the country. This was the year that some of the mightiest banks and brokerage companies bit…

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FHA Streamlined Refinance – Lower your Rate and Payments Without Credit Qualifying or a New Appraisal

With rates near an all time low, refinancing has become a big thing again. Now, when times are tight, lowering your interest rate and your payment can make a real difference in your family’s budget. Rates are great, but one of the big problems in this market is that a lot of people who could get the most benefit from refinancing their mortgage, won’t be able to. With the slow real estate market property values are down, which means more homes aren’t appraising high enough to qualify for the new loan. Credit standards are more restrictive and you will need to verify all your income and assets. But if you already have an FHA mortgage, none of these factors matter. FHA has one of the easiest and best programs for refinancing your mortgage, the streamlined refinance. The FHA streamlined refinance is only available for borrowers who currently have an FHA…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending December 26th, my take on the week’s financial news and how it affected Illinois mortgage rates. I hope everyone is having a great holiday season. This has been a short week for many people, including the traders on the mortgage backed securities markets. With a thinly traded market, and wholesale lenders filled to capacity with loans, mortgage rates ticked slightly higher this week. Still, we are near the best rates in the last several years. There will be a lot of people who benefit from the low rates we are seeing now, even if the rates don’t move any lower. With rates this low, this could be one of the biggest refi booms ever, but there are some changes this time which make this very different from previous refinance waves. 1. Not all borrowers will qualify…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending December 19th, my take on the week’s financial news and how it affected Illinois mortgage rates. The Fed added some more stimulus to the economy this week by lowering the Fed Funds rate to an all time low range of 0 to .25%. This is the rate the big banks get when they borrow money from the Fed. Most people expected that they would cut rates to a half point, leaving some powder dry for another cut later. Instead, they cut to the bone in order to break the credit log jam. The Fed also announced that they will step up their purchases of mortgage backed securities and other bundled loans including car loans and student loans. The idea here is that the big banks, getting money for free and having a market to sell their…

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Fed Rate Cut Means Early Present for Mortgage Shoppers

The Fed gave consumers an early Christmas present at their meeting yesterday. In an unprecedented move, they dropped short term rates down to a range of 0 to.25%. The Fed was expected to cut rates by a half a point, leaving some ammunition for future action. Instead, they went bold and cut the rates effectively to zero. This was a surprise, and an indication of how soft our economy is. But the real gift to consumers was the statement that went along with the rate cut. The Fed had already started a program of buying back mortgage backed securities and other long term obligations. In their statement yesterday they announced that they were going to expand that program and buy back more mortgage bonds, and do “whatever is necessary” to get the economy moving again. Both the stock and mortgage backed securities markets rallied on the news, and mortgage interest…

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Questions? More Frequently Asked Mortgage Questions Answered

I’m thinking of refinancing my mortgage, but I heard that rates are going down to 4.5% soon. Should I wait? This is a question I’ve been getting a lot lately. This was a leak from Treasury Secretary Paulson’s office a few weeks ago about a program they were supposedly  looking at. This program would apply to purchases only, so it wouldn’t effect refinance rates, but even for purchases this is more of a random idea rather than a well thought out plan. The President-elect’s team said they were not involved in any planning, so the chances of this actually coming out appear to be slim. The thinking behind this goes something like this. In order to get the economy moving again, the real estate market needs to stabilize. If mortgage rates are low enough, more home buyers would be willing to buy homes. This makes sense, but the details are…

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Illinois Mortgage Rates weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending December 12th, my take on the week’s financial news and how it affected Illinois mortgage rates. This is usually the time of year when business starts slowing down in anticipation of the Holiday season. This is usually the time for Christmas shopping and Holiday parties, and business productivity often takes a back seat to seasonal cheer. In most parts of the economy business is slowing down, but it isn’t a result of excess cheer. It’s still hard to find a parking space at the shopping mall, but too many of the stores are having going out of business sales, and the reports show there are more shoppers than buyers this year. When the news is all doom and gloom, more people feel anxious about their jobs and their financial well being, and are holding onto their…

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Happy Birthday! Illinois Mortgage Rates and News is 1 Year Old

Last week was a busy week, and being busy, I neglected an important (for me) anniversary. This blog, Illinois Mortgage Rates and News, turned 1 year old last  week. One year is not a long time. One year old babies still can’t speak and crawling is usually the favored form of locomotion. On the other hand, thousands of blogs are born every day, and most of them only last a post or two before going down for the count. Based on that standard, we are close to middle aged in blog years. Well, maybe not middle aged, but we are well past the crawling stage and moving along quite nicely. There have been a lot of changes in the mortgage industry in the year since this blog started. The mortgage implosion was underway when we started last December, but it picked up steam and moved from the housing market into…

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Illinois Mortgage Rates Weekly Update

Welcome to Illinois Mortgage Rates and News week in review for the week ending December 5th, my take on the week’s financial news and how it affected Illinois mortgage rates. It’s a year late, but the news is that it is official, we are in a recession. But you probably already knew that. The National Bureau of Economic Research, the official arbiter of these things, came out with the official declaration that the recession started last December. As a friend of mine said, that has to be a great gig. It’s like a weatherman who tells you what the weather was like yesterday. Or someone who tells you not to step in the wet cement, after your foot is already stuck. I’ve been in a football pool for years, and I know that my winning percentage would be much higher if I could pick the winners after they played the…

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Chicago Mortgage Refinance – What You Can Do for a Quicker and Smoother Closing

After the big drop in mortgage rates last week, we are in another refinance boom. Rates are near their low point for the year, and though they are bouncing around from day to day, this is a great opportunity to get your rate down and save some money. December is usually the time when the real estate market slows down as home buyers are more interested in Holiday parties and Christmas shopping than schlepping through the snow looking at houses. It is also the time when most of the mortgage support staff (appraisers, processors, underwriters and loan closers) catch up on their down time and take their vacation days before they expire at the end of the year. So it is almost a rule that the mortgage industry runs shorthanded in December. What this means is that a lot of people in the mortgage industry are going to be pulling…

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