HLM Mortgage Blog

Do you feel like you need to schedule a therapy appointment after watching the evening news?  The struggling economy, banks failing, unemployment on the rise, etc...  One common theme that we are all hearing is that banks are tightening up and not lending money.  When it comes to mortgage lending, this is simply untrue. 

The majority of mortgages are backed by Governmental or Semi-Governmental Agencies like Fannie Mae, Freddie Mac and HUD.  This means that (as long as a loan conforms to certain criteria) banks are not on the hook if a loan goes bad...the Federal Government is!  This helps make financing available to most applicants.  People typically only have difficulty with financing if they cannot put at least 3.5% down on a home or if they cannot document their income.  For the most part, all other underwriting guidelines remain unchanged. 

We also hear a lot about the decline of home values.  Atlanta has fared much better than many markets across the US!  Florida and California markets experienced a dramatic decline following a rapid increase in values over the past several years.  With housing starts nearly non-existent, we will see existing inventories come down as fewer new homes are in the pipeline.  This should eventually lead to price stabilization as the oversupply will become less of an issue.  Interest rates remain near 40 year lows (at the time of this blog) at 5.625% for a 30 year fixed rate loan. 

So, when you're at the holiday dinner party and someone starts talking about how bad everything is, perhaps you can provide them a different perspective.  While there may be clouds in the sky, the sky is truly not falling!