Bold Mortgage Prediction!

Mortgage Prediction: More Red Tape

Clients know that I demur when asked where I think interest rates are headed.

If Ben Bernanke, Chairman of the Federal Reserve, doesn't know with a high degree of confidence -- what chance does anyone else have?

That said, here's one major development that's easy to predict: there will be more red tape.

That's so because government, by default, is going to be more and more involved in the lending process.

In fact, it's likely to be the loan originator, the underwriter, the appraiser, the insurer, the servicer, and the securitizer (did I forget anything?).

Since the full nationalization of Fannie Mae and Freddie Mac almost a year ago, it's already playing many -- if not all -- of those roles.

If the old focus was making money (through any and all means), the new focus is not losing it.

That mindset -- plus government "process" -- is not likely to breed expediency or economy.