Mortgage Applications at 7-Month Low
Mortgage applications plunged to a seven-month low last week as demand for home refinancing loans tumbled 30%, data from an industry group showed Wednesday. The drop does not bode well for the hard-hit U.S. housing market, which has been showing some signs of stabilization, with sales rising and home price declines moderating in many regions of the country.
To read the entire article, please visit: http://money.cnn.com/2009/07/01/real_estate/mortgage_applications.reut/index.htm?postversion=2009070107
posted by Editor in Chief at 10:34 AM
1 Comments:
The interest rate has very little to do with people's ability to qualify for mortgage financing. If it were the case, people would simply buy lower priced homes - not difficult in this market. In the case of refinance activity, those who made rational buying and financing decisions in the last 20 years do not need to refinance. Those that blindly accepted big corporate advertising promises out of personal greed deserve the consenquences of right-sizing their life-styles.
Demanding the Fed lower interest rates will provide the illusion of improvement in the housing market, generating business for the mortgage bankers, appraisers and title companies only. It will not improve appraised values or take foreclosed properties off the market. The problem is a shrinking middle class. Once upper-middle class professionals are now struggling to maintain their life-style, working 2 or 3 jobs just to make ends meet. No one has time, energy or courage to purchase homes. People without employment can not qualify for any loans, as they are increasing debt to eat and get medical care.
Refinancing activity is a temporary breath of air for a drowning victim, with no life jacket, no life boat, no rescue mission on the way, in the middle of a shark feeding frenzie. The primary benefactor is the mortgage industry, adding tens of thousands to the compounded interest accrued to advertising-educated fools. Why is compounded interest even legal? It serves as a dis-incentive for refinancing but no one pays any attention. Refinancing every 5 years keeps those who perceive themselves to be home-owners stuck as renters (that take better care of the property) to the Central Bank's obscenely wealthy owners.
Since it was the mortgage, appraisal and title industry CAUSING the mortgage meltdown (with the assistance of the general ignorance of homeowners), perhaps the government should be more concerned with the average middle class American than making sure mortgage criminals at all levels continue to get paid...but that's not what you want to hear.
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