Current mortgage problems- have you locked?

My broker just called me and told me she locked my rate based on what's been happening with AMG. I'm in at 6.75%, i was hoping it would go down a bit but now it looks like that won't happen.

Anyone else locking now? or are you going to wait?

Re: Current mortgage problems- have you locked?

I am curious.. what does what happened with AMG have to do with the rates? Does anyone have a link to a newspaper clipping on this they can add so I can catch up on what's going on?

Re: Current mortgage problems- have you locked?

it's not specifically AHM.... it's the whole industry. The best place you can catch up on the mass disarray is cnbc (ch 24). I know, it's the boring financial channel, but they have tons of segments on that these days.

Basically, it has been forcasted that over 1 billion in loans are expected to default before 2009. Most of these are sub-prime loans with variable/teaser rates given by shifty loan broakers (vs the bank directly) to individuals who do not even remotely qualify. The mortgage amounts were frequently close to the full value of the property. Add that to similar re-fi / debt consolidation 2nd mortgages, and you can see how dire the situation is.

The reason the poop hit the fan now is that the values of those properties dropped. So the mortgages are worth more than the property lien.

This hits every sector of the economy, becuase the builders have to lay-off workers, and many financial and housing listings on NYSE are diving.... which means investors are being hit, and they'll respond by spending less... hitting the retail market.

so this doesn't affect interest rates (the fed is responsible for setting that), but it does drastically increase the scrutiny of new mortgage applicants, as many banks are raising minimum qualifications, and are eliminating those middleman brokers.

chaos.......... complete, and totally avoidable chaos.

Message edited 8/2/2007 8:54:04 PM.