Marc's Mortgage Matter's

In a past life I worked in a cubicle next to a fellow who always used to say, "I always tell everyone that I give 100% at work. What I don't tell them is that 24% comes on Mondays, 29% comes on Tuesdays, 22% comes on Wednesday, 15% on Thursday, and 10% on Friday."

There was a story in the Wall Street Journal wondering "But if rates are so low, why isn't demand for new loans picking up? For one, most borrowers who could refinance probably did so last year, when rates fell below 5% in March, August, and December. Many borrowers with an incentive to refinance can't qualify with today's tougher lending standards or don't think it's worth paying the closing costs on a new loan. Credit Suisse estimates that around 61% of all borrowers with a 30-year fixed rate mortgage could lower their mortgage rate by 0.75 percentage point at current rates. But analysts estimate that only 38% of those borrowers could actually qualify at current standards. More borrowers can't qualify because they don't have enough equity in their homes, their credit scores have taken a hit, or they've seen their income reduced."

A man in Houston, TX just pled guilty in a mortgage fraud scheme. So these days, just what does using a child's Social Security number to secure funds for mortgages and committing wire fraud get you? The sentencing of 39-year-old Adrian Levale Cole isn't until September, but he faces 20 years in prison for his 2003-2006 handiwork.


We've passed the June 30 deadline for extending the tax credit deadline, but finally the U.S. Congress approved a bill extending the closing deadline for homebuyers trying to take advantage of tax credits ($8k for first timers and $6,500 for primary residences). Homebuyers with contracts signed by April 30 who failed to go to closing by the June 30 deadline will now have until September 30 to complete their purchases, assuming that the President signs it.

Low and slow is a good thing, especially when we're talking about ribs on a Fourth of July backyard barbeque, but not so much as an economic situation. If you're concerned about the direction of the economy and the prospects for a robust recovery, not only are you not alone, but you are probably being joined by any number of former optimists. The already-slow economic recovery seems likely to slow further.

Of course, weak growth and investors hungry for protection against roiling stock markets are pushing interest rates downward, with constant investor appetites for mortgage-backed securities joining that for Treasury obligations. Mortgages aren't quite as safe as government-sponsored debt, but close enough, and they sport far better yields at the moment. With the world still awash in central-bank cash, the money has to find a home somewhere.

Low mortgage rates are a favorable support for housing markets, but the pool of folks who can take advantage of them remains limited, and the recent decline to new record-low levels is in actuality only a small dip from rates we've seen on any number of occasions over the past eight months. In this way, and aside from historical reference, it's not all that much to get excited about.

Without widespread and substantiative improvement to the labor market, the recovery remains imperiled. Consumer demand for houses, autos and goods will remain tepid, and the pool of those who can put low interest rates and solid resources to work will remain relatively small. Looser credit would no doubt help grease the skids, but financial market "reform", credit legislation like the CARD act, tight underwriting standards for (ultimately) taxpayer-backed mortgage loans, strict regulatory oversight and other forms of credit restriction or curtailment make ventures into risk out of the question at the moment.

With the homebuyer tax credit gone and commercial real estate markets troubled, expecting a lift in construction spending seems a bit of a stretch. We're trying hard to look for optimistic signs, the little flares and sparks which suggest that we're on an economic upswing. Early in the year, they seemed much more numerous and frequent, but they do seem to have diminished over the last month or two. The Summer is setting up to be a slow one, and in a way, that's to the benefit of those needing just a little more time to get their particulars together to take advantage of low interest rates to refinance or to commit to the purchase of a new or existing home. While talked about in the press this week, a double-dip recession is still the least likely course of events for the economy, but risks remain prevalent.

If you can, this has got to be, still the best time to do anything at all involving  mortgage financing, that is again, ofcourse if you can!


A Virginia State trooper pulled a car over on I-64 about 2 miles south of the Virginia/West Virginia State line. When the trooper asked the driver why he was speeding, the driver said he was a magician and juggler and was on his way to Beckley, WV to do a show at the Shrine Circus. He didn't want to be late.

The trooper told the driver he was fascinated by juggling and said if the driver would do a little juggling for him then he wouldn't give him a citation.

"But I sent my equipment ahead and don't have anything to juggle."

The trooper said he had some flares in the trunk and asked if he could juggle them.

The juggler said he could, so the trooper got 5 flares, lit them, and handed them to him. While the man was juggling, a car pulled in behind the patrol car. A drunken good old boy from West Virginia got out, watched the performance, then went over to the patrol car, opened the rear door and got in.

The trooper observed him and went over to the patrol car, opened the door asking the drunk what he thought he was doing.

The drunk replied, "You might as well take my a-- to jail, cause there ain't no way I can pass that test."