California Housing Market News
Tips and news from professional Mortgage Advisor Kevin McLemore
December 4, 2007
Hello...
Wow, 2007 has really flown by, and with the holidays upon us, we will be in January in no time at all. Mortgage rates are
extremely attractive. Even if your 30 to 60 days delinquent on your payment, there are still programs that can help.
December is generally the best month to purchase a home. Contact me if you need a qualified Real Estate Agent...Please
email or call me with any questions you may have.
Best regards,
Kevin McLemore
Residential and Commercial Mortgage Advisor
iAmerica Capital Inc.
916-475-2339
888-312-0958 x719
www.iamericacapital.inc
An Historical Comparison to our current Mortgage Situation.
The current mortgage environment has drawn many comparisons with the 1930’s, when the government stepped in. It is
generally agreed that without those fundamental changes, the Great Depression could have been much worse than it was.
In the early part of the last century, most home loans were a 5-yr ARM with a balloon payment. A brief summary: In 1932, the
National Association of Real Estate Boards proposed (and Congress created) the Federal Home Loan Bank System,
modeled after the Federal Reserve System. Twelve regional banks were created, and a Federal Home Loan Bank Board,
like the Federal Reserve board, was set up to oversee them. The Appraisal Institute was also founded in 1932 by the
appraisal industry. Bankruptcy and eviction laws were modified, and in 1933 Congress created the Home Owners Loan
Corporation to help borrowers move from 5-yr balloon loans to 15-year amortizing mortgages. In 1934, Congress created
the Federal Housing Administration (FHA) to insure mortgages, and the Federal Deposit Insurance Corporation (FDIC)
intended to prevent runs on banks from depleting resources for home mortgages. Lastly, in 1938, Congress created the
Federal National Mortgage Association (FNMA). Some argue that it is very early in this business cycle, but it is easy to see
the amount of government intervention compared to today’s market, especially at the Federal level.
And finally, .a little humor……..
Speaking of balloon payments, there was a recent cartoon showing Santa and old man Scrooge. They are standing in front
of Santa's house in the North Pole with snow everywhere. There is a "For Sale - Foreclosure" sign in the front yard. Scrooge
turns to Santa and says, "Here's the deal Santa. With no apparent income you'll never make your balloon payment, and with
global warming, you're now in a flood plain."
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