Sunday, January 27, 2008

The Shortest Refinance Boom Ever?

interest rates


So it seems, despite the touting of IndyMac's Michael Perry that the lender had locked over a billion dollars in loans on January 23rd, that most were too late to the party. The above mortgage interest rate trend chart and Google Trends chart below show the short drop in rates compared to the spike in inquiries as borrowers responded in mass to headline news that mortgage rates had plunged.

Some believe that that the stock recovery was profit taking by investors short on financial and housing related stocks. I tend to agree with Perry's optomistic outlook, despite the fact that there are hundreds of thousands of potential borrowers who missed the boat, there will be others that set sail as the year progresses, and we see an increased conforming loan amount, FHA reform, and rates will return to their descent after the Bernanke sponsored Wall Street shorting party ends and we get back to reality.

Wednesday, January 16, 2008

Government Intervention and Mortgages: Buckley

I was particularly surprised today, when tipped me off to an article written by William F. Buckley, Jr. the Conservative icon, columnist and founder of The National Review. In this article Buckley argues that the government should have more closely regulated mortgage lending, and now in retrospect must step in and forbid "the liquidation of mortgages until the disparity between true value and hypothetical value is pounded away by time and inflation." Aggressive lending practices, he argues, are now causing a rash of foreclosures which in term are lowering the values of all homes.

I had to re-read the article twice to make sure I had not misread a father of modern conservative politics arguing for government intervention of such a drastic sort. Did he not forget that these same aggressive lending practices fueled the run-up in property values that is now deflating?

Who knows, maybe he's been smoking something over bridge with septuagenarian Jimmy Cayne.