I was just watching one of the financial shows on television and listening to a wealthy investor and one of the co-hosts talking I wanted to scream, but waking my wife wouldn't help. Each one considers the other one an expert in the field of finance as well as themself and yet I didn't hear one word of truth out of either during the period I was able to stomach the show. They, of course, were talking about the sub-prime meltdown and about a large mortgage company that had gone under that I knew wasn't a sub-prime lender. They failed to mention that. And quite possibly because they didn't know, or worse, didn't know the difference between sub-prime, Alt A and prime lending.
Out of the wealthy investors mouth came " you can't give people with good credit loans at 6.5% and people with bad credit loans at 2%". I couldn't agree more, but it didn't happen. The co-host in a very quiet and respect full voice said "I guess there will be sub-prime loans again within a couple of years" and the wealthy investor concurred. I also agree but for a different reason. We have sub-prime loans now, so I can't see why we wouldn't have them in several years as well. The sad part of this little episode is that thousands of people were probably listening and getting the incorrect information. Wrong information doesn't help anyone at any time, so why not find out the truth before disseminating information.
I could spend days and columns talking about the collapse of the mortgage market as we have known it but it wouldn't be useful to those who might read my column. Instead I would like to inform the readers about what is going on in the mortgage market today so they can make the appropriate moves.
Conforming loans, which are called that because they conform to the rules of Fannie Mae and Freddie Mac, are doing fine. They are paying at least a little attention to the 10 year treasury note which has been, up to now, the benchmark for all of our mortgage rates. They are still higher than they would be in normal times, but within tolerable limits.
Conforming fixed rates, 10 years, 15 years, 20 years and 30 years are all within a narrow range at the bottom of the 6% range to the middle 6% range, generally without points. They could move lower as the 10 year treasury note continues its slide. Conforming loans have a current maximum of $417,000 for single family residences, $533,850 for duplexes, $645,300 for tri-plexes and $801,950 for four plexes. These limits are 50% higher in Alaska,Hawaii, Guam and the US Virgin Islands.
Roger Schlesinger's Mortgage Minute is heard on hundreds of radio stations and daily on the Hugh Hewitt radio show and Michael Medved shows. Roger interacts with his hosts and explores the complicated financial markets in order to enlighten his listeners and direct them along their own unique road to financial freedom.