Springfield Area Blog

Thought I would pass this along to everyone.  It was written by a friend of mine at Gorman and Gorman and addresses the current relationship between the financial problems on Wall street and how they relate to the mortgage industry.  Any feedback is welcome!

I hope this message finds you and your family well after the stormy weather much of the country has endured from the remnants of Hurricane Ike. The financial industry suffered a “storm” over the weekend as well. Lehman Brothers filed for bankruptcy after 158 years in existence, due to their overexposure in the high-risk mortgage market. Another casualty narrowly avoided was Merrill Lynch, which is being acquired by Bank of America. Also on the ropes is insurance giant, AIG, as they try to raise cash quickly to stay afloat. So what do all these headlines mean to the real estate and mortgage industries? Believe it or not, it means better mortgage rates. Many investors are pulling money out of the stock market and putting them into Mortgage Bonds - which dictate long term mortgage rates. In other words, this tragic news represents tremendous opportunity for mortgage borrowers in the short term. These drops in rates don't last forever and should be taken advantage of if they make sense.