Week in Review - July 25 - 29

Rates were a bit better, then worse and now a bit better again. The volatility remains very high as the government continues to handle this debt ceiling like a monkey would handle your mom’s precious china…recklessly. It’s messing with our whole flow and because of that it keeps us from getting a solid handle on the actual market. Regardless of the above, we are ending July of 2011 very similar to where July of 2010 ended, which year over year isn’t too bad. Rates are still in the 4% range on the FHA and 30 YR fixed programs and the 3% range on ARM products. You can’t go wrong with those numbers.

Here is the rest of the week in review:

• Debt Crises Looming – Clearly we have an issue between the House, the Senate and our President within our country. There comes a point, where the truth is, compromise is needed as President Obama stated this morning. I do understand the stance on the Republican side (though most of it falls on the tea party – which I probably hate the name of the group so much that I subconsciously avert from any “allegiance” to their cause) as it seems getting the spending in order is a real priority. I also understand the point on the democratic side (notably President Obama) and their need to increase the debt ceiling for longer than six months or at least until after the reelection…I would do the same thing if I was in his position. The hard part to grasp is the continued decision to blame each other. Has there ever been a time where compromise was reached when both sides blamed the other…I don’t think so. We have to stop blaming and start talking and discussing. We will see if they figure it out.

• Mortgage Rates and Debt Crises – Just resolving the crisis isn’t enough…here are the potential two ways that this debt crisis could be resolved and how they both impact mortgage rates. If the debt ceiling is extended and the nation’s credit rating is downgraded – rates will inevitably increase across the board. If the spending is capped and we cut spending while keeping the credit rating high – then rates will hold steady to get fractionally better.

• Cost of Interest and the US Consumer – As a mortgage consultant, it is true that I often saddle people with the largest debt they may ever have. While I do make my living in this arena, it truly is in the hopes that the mortgage they choose is not a burden but a commitment they are ready to make. Click on the title to this section and see a blog that tells the truth about the cost of the Consumer debt – mostly slanted towards credit card debt. In reality though, all interest that is owed to anybody else is money you are losing every month. Those who control the money…control the stakes…perhaps our government could learn a few things about wanting others to owe you vs. you owing them.