BluefoxToday blog : Mortgage money widely available while other bank activity freezes

Mortgage money widely available while other bank activity freezes

The media is all over the map describing in sweeping headlines how the American and international financial systems are on life support. Central banks across the globe are pumping all sorts of cash into their respective banking sectors to stay ahead of the advancing wildfire and keep the entire inter-connected financial network from collapsing. It's important news, of course, and has caught consumers from Las Vegas to Washington in this tantalizing development.

There is at least one sector in the U.S. financial system that is presently surprisingly stable, though. It's the mortgage business. True, it does have some issues to deal with like painfully high foreclosure numbers and tighter underwriting guidelines but when it comes to having capital available to make home loans, it's there.

It's possible because Washington has practically taken over a large share of the industry through its institutions Fannie Mae, Freddie Mac and FHA. They have an easy and cost-effective access to international capital markets thanks to having the U.S. Treasury guaranteeing whatever they do there. At least for now the mortgage trade is pretty much controlled by the government but under these trying circumstances its involvement was necessary. Without it the besieged real estate market would be now wallowing in muck thigh high.  

Mortgage rates are still very attractive and those with decent credit can get a home loan. An FHA-insured loan can be acquired for 3% down and Fannie Mae and Freddie Mac have programs requiring only 5% down. Those are good, low numbers. And what also is uplifting is that many of the once over-heated markets, like Las Vegas, are seeing prices in full retreat and that is bringing buyers out to look for bargains.

Today, despite the spectacular roller-coaster activity on Wall Street and banking deep freeze the mortgage market is holding its own and open for business.




Provided by: 

Esko Kiuru
Mortgage, real estate and apartment industry analyst - syndicated mortgage, housing and property management blog
My cell: 702-499-1006

Comment balloon 10 commentsEsko Kiuru • October 21 2008 05:47PM


Esko we do not have any problem funding loans at McCue Mortgage.  Our biggest problem is finding qualified borrowers who are actively looking right now.

Posted by George Souto, Your Connecticut Mortgage Expert (George Souto NMLS #65149 FHA, CHFA, VA Mortgages) almost 10 years ago

Esco, it is reassuring that mortgages are still available for the qualified buyer.  Now if we could just find a way to encourage all those "on the fence" and "let's see if prices drop further before we buy" buyers, we would be in business.

Posted by Vickie Slade, Service You Can Trust ~ Someone You Can Depend On (Colorado Landmark, Realtors) almost 10 years ago

Esko: Thanks for the true thoughts. Of course we're all hopeful the public will start to clue in and recognize a great opportunity! Take care.

Posted by Paul McFadden, Pest Control, Seattle, WA. (Paratex) almost 10 years ago


The availability of mortgage money is a big relief during this financial freeze.

Posted by Esko Kiuru almost 10 years ago


Many buyers are extra cautious right now, that's true.

Posted by Esko Kiuru almost 10 years ago


Vegas resales in the lower end of the market is doing pretty good now as prices have dropped.

Posted by Esko Kiuru almost 10 years ago

Great post.  Mortgage lending is one of the stable aspects of our economy today.  Thanks for your input.

Posted by Rebecca Anne Cole (PNC Mortgage ) almost 10 years ago


This still vibrant corner of the finance market has been overshadowed by the other news, unfortunately.

Posted by Esko Kiuru almost 10 years ago

When my clients ask if there is still mortgage money available, I tell them, "Yes, for those who are qualified.  But of course that's the way it always should have been."  We moved off course the last few years by lending to those who really weren't qualifed. 

Posted by Steve Hewson, Denver Metro Comnulll Real Estate (KW Commercial Real Estate, LLC - Denver) almost 10 years ago


Now we are returning to a marketplace where you need to prove you can make the mortgage payments.

Posted by Esko Kiuru almost 10 years ago