The Beginning of the End of the Housing Slump - Profit From it Now!
September 25th 2008 08:04 am By Web Development in India
I am excited to bring you the news that - in the short term, at least - the nationalization of Fannie Mae and Freddie Mac that happened over the weekend is having the desired effect.
The result of the nationalization, or conservatorship? Mortgage rates closed Friday at 6.25%, and opened yesterday morning at 5.5%. Why? Because the Nationalization of Fannie and Freddie caused MBS (mortgage backed securities) to look very similar in stability to a Treasury Bill. Now these bonds are (implicitly) backed by the full faith of the Federal Government. So, money went pouring into these securities.
And that has spelled some good news for you. Action Items:
1. Contact all the prospects who are fence-sitting. They want to buy a home - someday - but are waiting in the wings, either because there is just no urgency, or out of nervousness about the market. Tell them what rates are doing, and put them under contract.
2. Call your past clients. Tell them what rates are doing, and invite them to a refinance feasibility analysis, FREE!, with your lender. Oh, your real reason for calling? Tell them about the $7500 tax credit for First Time Home Buyers and ask them to rack their brain and refer anyone they know who is considering buying their first home to you.
Going forward, I would expect volatility in rates as the market digests this unprecedented move by the government. Initially, at least, it has been very good in stepping out to accomplish what the Fed wanted - to spur the housing market to find stable ground.
Nothing so momentous as righting the housing slump happens overnight. But remember, that in spite of all the numbers, and the belief held naively by some that the hard numbers dictate the market, it is not true. Sentiment dictates the direction of the market - a Bull or Bear market in stocks, just the same as a buyers’ or sellers’ market in housing. And, as sentiment shifts, the move will be rapid and buyers will jump on the bandwagon, and sellers will begin to stand firm on their price again.
At first glance, the take-over is working. So, jump out in front of this wave and ride it high!
Jim Duffy is a Mortgage Banker with Phoenix Global Mortgage in Atlanta, GA, and has helped thousands finance their homes over the years. Check out his blog, and leave a comment, http://www.MortgageLenderAtlanta.com
