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How will stopping foreclosures nationwide affect mortgage rates?

by JohnBrewer from Austin, Texas. Oct 12th 2010 Reply


Chris Ghaemi (MultiStateHomeLending)
#333 ranked lender in California - 3 contributions

Stopping foreclosures nationwide will not have a direct impact on the rates as unemployment data, Feds responses and other economical data might have. However, the laws of supply and demand will without a doubt create some interesting twists. First of all stopping foreclosures is not a government mandate or an issue that everyone must adhere to. This is a voluntary decision made by some large size lenders who had prematurely and without following various federal and state laws had proceeded with the foreclosure process. One simple example is the way B OF A had outsourced the process to so called experts who were actually glorified paralegal offices without any legit and concrete knowledge of mortgage laws. They were so inundated by the sheer volume of delinquencies that on many cases they simply ignored various legal and right to notice timelines. Now after close to three years of abuse, neglect and illegal activities, they find themselves in damage control mode. Going back to the subject of the halt in foreclosures, we will probably see fewer inventories of homes for sale which will means a higher demand and higher prices. In my opinion and if this halt lasts longer than expected, the rates will inch up a little as most of the issues are market driven and regulators will not see a need to interfere and artificially push the rates down. Best of luck to youMichael GhaemiDirector of Business Development 2081 Business Center Drive #175Irvine CA 92612949 630 3135949 313 0908 Fax

Oct 12th 2010
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Barrett Stokes (barrett)
#48 ranked lender in Texas - 25 contributions

I am not an expert, my thinking from lowering nationwide foreclosures and reducing the national debt crisis it will therefore allow interest rates to maintain single digits and allow lending institutions to show positive margins.

Oct 12th 2010
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Rudi Hofmann (CaPortfolioLoans)
#282 ranked lender in California - 380 contributions

Foreclosures will interest rates by having a negative affect on property value. Rates are based on loan-to-value (LTV). The higher the LTV, the higher the price adjustment. That may also create a mortgage insurance requirement, further increasing monthly payments. .... Happy funding, Rudi

Oct 12th 2010
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