The end of the mortgage industry as we know it....

The mortgage industry has not known one piece of good news since summer of 2007.
Over 265 mortgage lenders, most of them subprime have shut down. Major US banks have ceased their wholesale operations. Hundreds of thousands of mortgage related jobs have been lost. The government came to the rescue of bear sterns. As of yesterday the government has also taken over both Freddie mac and Fannie mae.
I heard a newscaster on CNN say that the good news resulting from the bail out of major mortgage companies is that 30 year mortgage rates should decline which is good news for buyers and sellers alike.
My question to this clever journalist is how good is a low interest rate to the millions of applicants who cannot even get approved for a loan due to a credit crunch second to none.

Truthfully the only good outcome of this mortgage meltdown is the elimination of mortgage programs(stated, sisa, nina) that should have never existed as well as the elimination of crooked mortgage professionals that should have never been allowed to handle people's finances.

It is crucial that confidence should be restored to lenders in order to loosen up lending criteria but not to pre-2007 levels. Confidence should also be restored to mortgage insurance companies that are currently making it harder to qualified borrowers to get a loan over 80% of the value of the property.

One of the few beacons of hope left is FHA programs that are still being offered to borrowers with spotty credit. Although I do not see how the government can guarantee now more than half the mortgages written in the united states for a long period of time. It puts the federal housing agency as the sole risk taker in this equation and that could spell financial disaster in the near future. Especially if foreclosures continue at the current rate.

The current mortgage landscape is really hard to define. However it looks like wholesale channels are getting extinct. The ones that are left are peddling the same programs which makes competition fierce. Now that could be the best news yet for borrowers.
Retail channels are now taking over. Remember however that obtaining a mortgage directly from a bank can still be costly but at least most banks adhere to higher lending standards than those of most brokers. You can always seek the advice of a mortgage consulting company like BrokerPolice which doesn't originate loans. It simply advises you on your transaction so that you pay a lower rate and lower closing costs.

Visit http://www.brokerpolice.com/ . It is your source for mortgage advice, mortgage help, and your ticket to a low cost mortgage and the best mortgage consulatation.

Mehdi Cherkaoui