MORTGAGE UPDATES

Well, as you have seen, the mortgage industry has been bounced around and battered almost as severly as investment firms and investments in general the past couple of weeks.

The big news in mortgages right now is rates!

Last week alone rates for the most popular programs, 30 year fixed, 15 year fixed and 5-1 ARMs rose nearly .500% from the previous week. It was the biggest one week rise in rates in over 20 years.

Some say it is a result of the $700 billion government bailout. Banks are reluctant to open their wallets due to uncertainty about what to lend and who to lend to. The government's $100 billion investment in 9 of the countries largest and strongest banks may help loosen up credit. The theory is that with improved capital positions, banks should be able to increase lending activity immediately. We shall see!

As far as blue skies or rays of sunshine breaking through the dark clouds, watch billionaire investor Warren Buffett. He is buying US stocks with his own money right now! His major purchases have been Wells Fargo, Goldman Sachs, US Bank and Sun Trust. Buffett has always subscribed to the theory of "buy low and sell high". He seems to think that stocks right now are a bargain and there is much upside for very profitable appreciation over the next 10 years.
With the bank investments, his theory seems to be that if banks don't lend they don't make money. Perhaps he sees more open lending policies on the horizon.

REVERSE MORTGAGES

Great news just in from HUD regarding the loan limits for Reverse Mortgages. HUD has announced that in the not too distant future, maybe by the end of this year, they will be raising the limit on all Reverse Mortgages guaranteed by HUD to $417,000. That means that in the high cost areas we will see an increase from $362,760. Lower cost areas will see an even greater increase because of the decision to have one flat limit in all 50 states.
This is great news for seniors who have been on the fence about a reverse mortgage. We are encouraging seniors who have been on the fence to begin the process now with their chosen lender so they can fund at the higher level when the new limit is instituted. Your lender should be able to give you a very accurate idea of how much you will qualify for with the increased limit using existing calculators. If your lender cannot, I can. Just drop me a line and I will be pleased to assist you.