Obama on the Dollar

Wells Fargo has stood apart from the rest of the United States banks for quite some time.  Avoiding the subprime aspect of the mortgage market was a huge check mark in favor the one of the greatest US banks.  Now that most financial institutions have been brought to their knees, Wells Fargo is the leading respectable mortgage lender in the country.  Most home owners check Wells Fargo to get their daily mortgage rates.  In fact, Wells Fargo is #1 on the google search for “home mortgage.”

With this in mind, many home owners are asking the question “will Wells Fargo mortgage rates continue lower?”  Well, in all reality, Wells Fargo mortgage rates actually follow the national average for mortgage rates.  The national average has been trending lower for several weeks now and it is likely that we will see a continuation of this trend.  The Obama administration is trying very hard to keep mortgage rates low and that is exactly what they plan to do.

If the government continues to work to keep mortgage rates low, it is our responsibility to take advantage of it.  Many home owners had the opportunity to refinance under 5% back in March and it is very possible that we will see those chances arise again soon.  It is important to go ahead and start doing your research early as you never know when mortgage rates could hit all time lows.

One of the best websites to do research is Making Home Affordable.  There is a plethora of information on the site that will help you expand your knowledge of the current mortgage market.  You may also find that you are eligible for some government programs that you were not away of.  Please take the time and look through this site as it could save you a ton of money when you decide to refinance.

Mortgage refinance rates have seen a steady drop for the last three weeks and that trend is likely to continue this week.  After the Federal Reserve Bank announced that is was going to continue its program to buy back US debt, the yield on the 10 year treasury rate sank.  The fall of the yield on the 10 year means that it is highly likely that mortgage rates are going to continue lower as well.  With lower interest rates, mortgage refinancing should see a spark.

Mortgage applications have seen a decline over the last few months, but it is very possible that we will see a huge jump in applications due to current home owners attempting to refinance at very low rates.  I would imagine that the jump in applications will be over 70% refinance applications because it seems that the new home buyer has just not come out of the woodworks quite yet.

The economy continues to struggle for this reason.  It is great that current home owners are getting the chance to refinance at extremely low rates, but it is going to take first time home buyers to really get the housing market off the ground.  By refinancing, home owners are putting more money in their pockets, but it is highly unlikely that they are using that money to put back into the housing market.  They are probably using it to pay off bills or to save for the future.

A major positive about the amount or refinance applications is the fact that it should put a positive image on the housing market.  If a new home buyer hears that a current home owner got a mortgage rate of 4.5% on their refinance, it is likely to increase the interest of a new home buyer.  The government is also ramping up their marketing plan to get new home buyers into the marketplace by placing internet and tv ads strategically.

Overall, now is one of the best times in history to refinance or buy that first home.  There are way too many great incentives to pass up this opportunity.  Use the internet and resources you have to educate yourself on the current housing market and get out there and save a bunch of money!

The Obama Mortgage Refinance Plan has been given an extra boost recently.  In the original refinance plan, home owners with a 105% loan-to-value on their mortgage were able to refinance at lower mortgage rates.  Now that the economy remains in a recession and the housing market has yet to see a bottom, Obama has extended that loan-to-value ratio to 125%.  This means that home owners that are 25% underwater are capable of applying for a refinance.

Making the prospect of refinancing even more alluring is the fact that mortgage rates continue lower.  Average mortgage rates were around 5.2% last week and they were falling as the week concluded.  Over the weekend, rates on the 30 year fixed rate mortgage have dropped to 5.1%.  It is very possible that we will see daily mortgage rates below 5% in the very near future.  If this does happen, look for a swarm off mortgage applications with most of them being for a refinance.

Another incentive that the Obama mortgage refinance plan offers is that it encourages lenders to actually lend money; what a novel idea!  As many of you know, at the end of the Bush administration and the beginning of the Obama administration, many lenders were hoarding their money and not “lending” it.  Financial institutions were so stingy with their money that the government had to step in and offer incentives to these lenders to actually give borrowers a chance.

Since March, many of my friends and family have had the chance to refinance under 5%.  It is an amazing feeling to know that you will pay on a mortgage that has an interest rate of under 5%.  It is hard to believe that this opportunity it coming again, but it sure looks that way.  If the Federal Reserve Bank continues to buy up US debt, it is almost certain that we are going to see mortgage rates drop under 5% again in the very near future.

Even if rates are sure to drop in the future, it is a good idea to go ahead and start the refinance process.  One of the biggest problems that Americans have is that they love to procrastinate.  If an activity is outside of our “comfort zone” it is likely that we are going to wait until the last minute to do it and then we aren’t going to sink our total effort into it.  Getting a mortgage was the biggest financial decision of your life, why not take the time and effort to refinance at a rate that could save you hundreds of dollars a month.

There are many great resources available to help you.  If your local bank or mortgage lender is not being a great assistance I urge you to go to Making Home Affordable.  You could search through that site for hours finding useful information.  Doing google searches for anything mortgage related will also bring up many useful internet resources.

There is one thing that can be said about the Obama Stimulus Plan: it is a change.  There is little argument that President Obama has brought about change to this country, but has it really helped?  One of the biggest issues that was to be figured out during this presidency was the overall economy.  George Bush left President Obama with an economy that was in shambles.  Home prices were falling off the face of the earth and unemployment was already beginning to rise.

To combat this, President Obama came up with a stimulus plan that was expected to bring more jobs which, in turn, would help put a bottom in home prices.  Unfortunately, we have yet to see that happen.  The Case-Shiller data continues to show that home prices are declining year over year.  The even more disheartening statistic is the fact that most major housing markets are down month over month as well.

The biggest issue that President Obama has to solve is the unemployment rate.  If Americans do not have jobs, how are they going to make their mortgage payments.  If mortgage payments aren’t getting made, home owners are going to lose their homes.  No matter how few homes are built in a year, the supply is going to increase if the amount of foreclosures and bank owned properties increases.

This is troubling news to an economy that is already struggling.  Foreclosures continue to increase, the unemployment has shown no signs of slowing down and home prices continue to drop.  No one is certain what will happen next, but it does not look good for the United States economy.  To compound matters, Federal Reserve Bank Chairman Ben Bernanke is trying to spend his way out of this recession.  His policy from the beginning has been that we need to print more money and spend our way out of a troubling economic time.

To many, this spells doom because there is likely going to be a case of inflation in the future.  If the government continues to buy up its own debt with paper money, the value of the dollar is sure to decrease.  When the value of the dollar decreases, we are likely to see commodities sky rocket in price, which in turn will be hyperinflation.

Hopefully President Obama and his staff realize this and do everything it takes to combat inflation.  It is a catch 22 situation though as we need to solve this financial crisis first, but we have to do it without creating a second financial crisis.  The one thing we have to continue to do is support our President.  Even if he is making the wrong decisions, we have to stand behind the man we elected and hope that he figures things out sooner rather than later!

The Obama mortgage plan was created back in March of 2009 and has done a great deal to help home owners stay in their homes.  Prior to the Making Home Affordable plan, it was near impossible to refinance with a loan-to-value over 100%.  The original plan changed that to a 105% loan-to-value to refinance.  This basically means that your home can be 5% underwater and you will still have an opportunity to refinance.  It is highly unlikely that you will get an extremely low mortgage rate, but you will still have the opportunity to refinance.

Recently, President Obama extended the plan to 125% loan-to-value to refinance.  This is a huge step because it means you can be 25% underwater and still have a chance to refinance.  This is important because many homeowners have seen the value of their homes decline because another house in their neighborhood was foreclosed or short sold.  Obviously there is nothing that they can do about it, but they are seeing a decline in the value of their home.

The other part of the Making Home Affordable plan that is very important is the 31% mortgage payment plan.  If your home was financed by Fannie Mae or Freddie Mac, the government is making all arangements to allow you to only pay 31% of your household monthly income.  This is very important to the homeowners who see the majority of their paycheck going to their mortgage payment.  This will no longer be the case as only 31% of your paycheck will go to your mortgage payment.

The 31% plan will not last forever so please do not think that you will pay 31% of your monthly salary on your mortgage until it is paid off.  There is a stipulation in the plan that as time goes by, your monthly mortgage payment will eventually work its way back to the original amount.  The thought is that you should be back on your feet within a few years and the economy should improve so making that payment won’t be as much of an issue.

Overall, President Obama is working very hard to keep you in your home.  Please make sure to do your research on the Making Home Affordable website as you might have opportunities you didn’t even know about.  There is very little doubt that if you make the effort and do what it takes, you can stay in your home!

Today President Obama helped the American public greatly by pushing average mortgage rates lower.  The actions by the Treasury and Federal Reserve are definitely going to make the 30 year fixed mortgage go under 5% sometime in the near future.  Once again, our President is doing everything he can to help this economy.  Someone needs to give him credit sometimes rather than just bashing every little thing he does!