Mortgage Expert, Tim Barnett

Many of my customers have been calling and emailing me this week with concerns and fears about the market and how it affects your personal savings and current and future mortgage loans.

I know it is very frustrating to watch your hard earned dollars disappear like a vapor, but let’s look at it from a historical perspective. We are clearly in the middle of a brutal bear market that began on October, 9^th, 2007. Since that time Stocks have declined by a breath taking 41% fall as measured by the S&P 500. Understand that a decline of 20% constitutes a bear market and a 10% decline is considered a “Correction”. The last bear occurred between March 24^th, 2000 and October 9^th, 2002 (Yes, October 9^th…). At that time we saw a 49% drop. Overall, the average bear market lasts for 12.3 months, with the average declining being 32%.

I like to look at history to see were we may be going in the future. In perspective, the current bear market is right in line with the average historical time frame and the extent of the decline is worse than previous bear market averages, but is still slightly better than the bottom made in 2002. Historical data might suggest that may be nearing the bottom. That would pose an argument that you might say, “We are in different times today.”, “We have never seen as much collapse of institutions as we have.” or “There has not been a financial crisis like this”. While that is true, it is always something different and will always be something. The last bear market was driven by September 11^th and fear of terrorism and fueled by the Technology “Dot” com bubble. At that time we had never seen that before either.

As for the date of yesterday’s date, October 9^th ,it is interesting that October 9^th, 2002 was the end of the last bear market and yesterday was the beginning of the present one. While this may just be a coincidence, it will be interesting to see if yesterday’s low will have some significance in stock history.

Mortgage Bonds are not much better. We hope that this morning they will begin trading better. This does not mean that we cannot make loans or there is a “Credit Freeze” on mortgage lending. Simply those rates will have a slight increase. Let’s face it, Rates are still great. When I got in this business I was closing families at over 10% for fixed rates mortgage. (I know I am dating myself) but fact is, rates in today’s market make homes very affordable. There are still programs that allow you to get into a home with less than 3% Down and -0- Down. There is still time to take advantage of these low rates by applying today at www.yourloantips.com .

Some good news today, Oil prices have dropped along with the market making the pain at pump a bit less painful. I actually got excited about paying $3.00/gal this morning.

We have to remain confident in our financial systems. It will recover because history repeats itself.   Families will always need a place to live and for most Americans 60% of their wealth comes from their home's equity.  America's MortgageCenter is still lending.  If you have a Fico score of 580 or better you can still get a Fixed Rate Mortgage at Low Rates.  Market Fear has created many great deals on homes in our area, I work with the Best Realtors in Texas that will help find you the a great deal on your new home. 

To learn more Insider Secrets about what really has attributed to the failures of these large institutions and how the recently passed “Bail Out Bill” affects Texans listen to my Weekly Radio Show on 104.1FM or on the web at listen.yourloantips.com.

Thank you for the opportunity to be your Mortgage Expert.