Pink Flamingo Mortgage Blog Headline Animator

Monday, August 20, 2007

Don't Believe all the Gloom & Doom!

It's tough to read the Real Estate or Business sections of most newspapers these days without thinking the financial world is imploding. Well the Sub Prime melt down has had an effect, but the echo effect of the media piling on is more damaging.
The Sub Prime default rate is up, no argument. BUT, the rest of the mortgage market is still doing pretty good by all accounts. Why the hysteria? Well, a lot of corporations, pension funds, and other sources of money got into buying Bonds backed by Sub Prime mortgages. This has caused the pain of the increased default rate to be spread around more deeply than just the Sub Prime originators themselves.
To put it bluntly, some people got too greedy! They put a lot of money into risky bonds, and now they are paying the price. If that was the end of it we would not feel such a pinch. So what is happening?
Those with the money have become very conservative very fast. To protect their own rear ends. That means a lack of funding for ANY mortgage. In order to bring money back into the market, all companies will tighten requirements for obtaining a mortgage.
Another player is the FED. They just dropped the overnight rate by a 1/2 point. This caused a quick reaction on Wall Street, as money got a little cheaper. If the FED continues to lower the rate, and allow more supply of money, while Mortgage Originators tighten up lending requirements, the market will return to normalcy soon.
One important point to observe: It is even MORE important to have a personal, honest, Broker to help you find your way through this mine field. At Pink Flamingo Mortgage we hold your interests to the highest level. Not ONE of our past clients has a loan that is in jeopardy. Why? Because the loan we found was the RIGHT loan for them in the first place. Great rates, yes. But the right loan is even more important. We can help you find that loan ... the right loan.
Give us a call at 858-496-8899, or visit our web site at: to check out the best rates.

No comments: