HomeLoans Blog

Prospective homebuyers are finding more and more that credit is preventing them from obtaining loan approval. As I work with buyers, more and more, I find that they have paid for credit repair without success. In some cases the efforts at credit repair have actually done more harm.

There are different levels of credit restoration, but they all should be done with an understanding of the goal.

Consumers must understand what credit repair can and cannot accomplish. Simply paying collections will most likely not result in a credit score improvement.

Further, for many consumers, improving the credit score should not be the only focus.

Credit is becoming more and more important. The right advice is critical.  We help numerous clients weekly qualify for home loan approval. Our approach is ethical, effective, and thoroughly explained. Call to set an appointment to review your credit.

Interest rates have finally made a strong move back down. Today there were three separate rate reprices to the better. It has taken some time, but maybe we can expect that rates will be more inline with the fundamentals of the economy.

Over the last several weeks, investors had kept funds out of the bond market because of a general uncertainty about any investment that has an element of risk.

Perhaps now we can expect rate movement to be governed by more normal concerns associated with economic reporting.

Upcoming we look to Friday's report on employment. My hope is to be able to return to blog posts about other mortgage matters and let rate fluctuations move in line with normal market ups and downs.

Bond markets have today gone through a massive sell off, pushing mortgage interest rates up significantly. Since my last post on interest rates on July 21, rates have almost increased a full percent.

This week has several important economic reports plus a two day meeting of the Federal Reserve's Open Market Committee.

Most experts expect a good bit of volatility in the stock and bond markets, but today the bond market has simply dropped.

Uncertainty about the bailout perhaps.

Uncertainty about the credit markets perhaps.

Uncertainty about the upcoming economic reports perhaps

Uncertainty about the coming Federal Reserve action perhaps.

Whichever, bonds prices are falling sending interest rates higher. There have been 3 reprices this afternoon.

The House Financial Services Committee has started the much anticipated regulatory reform hearings. There needs to be a great philosophical debate over the role of regulation and the extent of regulation.

Two 1990's pieces of regulatory reform have received a good deal of blame for the mortgage and credit crisis.

Gramm-Bliley-Leach basically removed restrictions that separated investment banking from depository banking. These restrictions had been in place since the depression.

The Commodity Futures Modernization Act created the unregulated credit default swap market that provided a false sense of security for the mortgage security bundles, that was used to justify the risky mortgage lending practices that have brought down our banking institutions.

The committee hearings started yesterday with political positioning and finger pointing. The blame goes to those who were in Congress when these two pieces of regulation were passed.

Most are still in Congress. Pointing fingers and assigning blame will not help. We are depending on those at fault to correct the problem. Finger pointing only serves for political posturing. If you want blame - follow the lobby money.

It is time, though, to get to work on this essential regulatory correction, before we nationalize more banks.

A good start would be to focus on repealing the two pieces of legislation that curbed regulatory restraints.

This week we have seen dramatic drops in interest rates. The reason - investors have moved back into the bond markets. The Federal Reserve has announced several surprising moves this week, designed to bring more liquidity to the credit markets.

Such government efforts to stimulate the economy might under normal circumstances be viewed as inflationary, which would tend to push rates higher.

This has not been the response.  Investors recognize that the Federal Reserve actions are required by a struggling economy. With the economic picture looking tough for the foreseeable future, interest rates could very well continue to lower.

This week's Federal Reserve actions include Monday's speech suggesting a second economic stimulus package and today's plan to purchase CD's and money market funds. Both of these actions are intended to help investors and banks feel confident in continuing to ease the credit markets.

For more expert information and commentary, look at the Daily Lock Advisory.

I have a professionally prepared mortgage analysis posted to this site each day. Visit Daily Rate Advisory. It provides very good market summary and expert opinion.

The real question though for me is why are rates staying so high when all the economic reports point to an severe economic slow down. Many economists are talking about a global recession.

Weak economic news typically lessens inflationary concerns and pushes mortgage interest rates lower.

The issue seems to be that investors feel the need to hold onto their cash, because of the credit crunch. Big investors who would normally be investing their cash into the bond market with the reports of a declining economy are now more concerned that they will not be able to access the cash for the immediate needs of their businesses.

Rather than purchasing bonds, many are selling bonds to finance their immediate cash needs that otherwise would be covered by short term lending.

This is because of the tightening of the credit markets.

The hope is that the actions of the Treasury Department and the Federal Reserve will unfreeze credit and take pressure off the bond markets.

With the continuing tightening of lending guidelines, credit repair is becoming more and more essential. There are various levels of credit repair and there are plenty of credit repair companies offering their services. All at different prices.

It is always good to use whatever free services that are available, first.

The basics of credit repair begin with knowing what your present credit rating is. Review your credit to make sure that it is accurate.

In most instances consumers who have only a few inaccuracies can be handle their own credit repair through the normal credit dispute process.

There are many consumers though with inaccuracies, duplications, or old references. Frequently professional direction or even help is necessary.

If your goal is to own a home, start with a mortgage loan officer who can explain what needs to be done. If a professional service is needed, that loan officer can help direct you to affordable and reliable credit repair.

At American Acceptance, we are very experienced at improving our clients credit. When we can help with the disputes, our credit help is free.

When the credit disputes are beyond our abilities, we have several companies that we can recommend for trustworthy credit disputes.

My new blog site is www.RichardsRealEstateThoughts.com. This blog is hosted separately from HomeLoansBlog which is part of my website.

I found that more visitors were commenting on RichardsRealEstateThoughts than on HomeLoansBlog, and there was mostly duplicate content.

You can find the new blog feed the website here.

So I made the decision to consolidate both blogs into one. Thank you for visiting my website and please look at my new consolidated blog.

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