A must read for your buyers!
There is a major push to move federally insured mortgage
securities into the private sector and have the government play a distant
secondary role. Attached is an article from the Wall Street Journal
(3-12-14), that covers the dismantling or at least a wind down of government
rescued Fannie Mae and Freddie Mac. What does this mean?
It means higher interest rates for the consumer.
The private sector will want more “skin in the game” from borrowers and higher
returns to insure against any potential of losses that the mortgage securities
market experienced in the 2007-2009 meltdown.
Regardless of how fast Congress moves this along (from the
sounds of the article it could be before the mid-term November elections), the
WRITING IS ON THE WALLS! Interest rates will move up and money could
remain tight. A second area of concern could be in the “jumbo” loan
market (for our counties, loans over $417,000), where historically,
consumers have had to pay as much as 2% points higher on their loan amount than
rates charged on smaller, conforming loans. This suggests that your
UPPER END buyers also need to BUY NOW!
Please use this article as a great “Item of value” to
counsel your buyers into making a good decision now.
Good luck!!
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