Blog Banter on Refinancing Now and Placing Blame
As I surf the blogosphere, I occasionally come across misconceptions that just need to be addressed. I had to respond to a post made on an article on MarketWatch’s site pertaining to the upturn in refinance activity.
Here is the comment I responded to…
by BobP863 2 hours ago
The obvious question is why not wait till the FED is through lowering interest rates? Unless there are no closing costs, i don’t understand the urgency. Unless, of course, those irresponsible mortgage lenders are desperate and have to oversell their products in order to survive.
Apparently in need of some guidance, I responded…
While you are waiting for the fed to finish lowering rates, house values are declining. Lack of adequate home value can make refinancing more expensive (pmi) or in some cases, not possible at all.
Further, lending guidelines are being tightened everyday. You can qualify yesterday and may not be qualified today.
The fed doesn’t control mortgage rates. Further deterioration in the Mortgage Backed Securities market could widen the spread between treasuries and mortgage rates. It’s possible to see treasuries move down in yield and mortgages move up in yield, especially in the current environment.
These are reasons for urgency. Maybe now you can understand. But I doubt you will ever understand that it’s not just a subprime issue anymore and that the most blame for the debacle is to be placed on Wall Street and the ratings agencies.
They (Wall Street) enabled every player in the chain. Without Wall Street lying about credit quality and spreading their fraudent securities around the world, we wouldn’t be in this mess. The lenders would not have lent and the buyers would not have bought unaffordable homes.