In a week in which several high-profile mortgage lenders closed their doors, not all news was bad. 

Mortgages rates for home loans bought by the quasi-government groups Fannie Mae and Freddie Mac actually dropped a bit. 

If you only watched the news, or market commentary on CNBC, though, you likely have the wrong idea about what is really going on within mortgage markets.  According to the people paid to sell subscriptions and/or advertisements, this is the worst melt-down in the history of the bond market. 

According to more level-headed observers, however, corrections like this are a normal and regular event. 

Large hedge funds (like those from Bear Stearns making headlines) made bets on the economy and those bets are losers right now.  And, whenever large losses occur on Wall Street, other players try to limit their exposure to the same type of loss.

Yes, there are plenty of homeowners whose lives will be impacted by the snap-back in available credit, but many can get help before the proverbial hammer drops. 

If there is a lesson to learn here for the average person, it’s that “now” is always a smart time to reach out to your financial planner to create a savings plan and limit exposure to the whims of Wall Street trading.

This week, the only major announcement will come from the Federal Reserve and their Tuesday meeting.  The Fed is widely expected to leave the Fed Funds Rate at 5.250%.

Without economic news, expect markets to react to external factors such as oil prices, commodity prices, and Wall Street sentiment. 


Tony Gallegos – Serving the mortgage needs of Kennesaw, Marietta, Roswell, Smyrna, Powder Springs, Dallas, Acworth, Woodstock, Douglasville, Hiram, Austell and Atlanta. Subscribe to The Mortgage Cicerone:


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