Florida mortgage brokers could barely contain their enthusiasm when  news leaked from Washington of a proposal to light a fire under the moribund housing market by driving down Florida mortgage rates to the 4.5% range.

The plan, which reportedly could be announced as early as next week, has the potential to dramatically boost the Florida mortgage and housing market and significantly lowering monthly mortgage payments for millions of Floridians.

Is this a dream come true or further evidence of the law of unintended consequences.  IF sales are stimulated, what would sell?  I believe it would be mostly short sales and foreclosures.  This would wipe out even more equity of a lot of people.  Appraised values continue to plummet making it very difficult to refinance for a lot of people.  It has also been reported that refis wouldn’t even be included in the lower rate program.  Pumping up the sales volumes on Florida homes is going to bail out realtors and builders but I fear that it will destroy property values even quicker for a lot of others.  Think about it - now instead of 1 bad comparable sale on your block there will be numerous.  How are people supposed to refinance when they’ve lost 40% of the value of their homes to short sales and foreclosures.  Some would say that the market is just correcting itself and those values were never there in the first place.  Well tell that to someone who purchased a house for $350,000 putting $100,000 down and now are faced with an appraised value of $225,000 - all their savings wiped out (or stolen by Wall Street).  Jumbo Florida mortgage holders are not included in this also. 

Treasury Secretary Henry Paulson said:  “The most important thing we can do to mitigate foreclosures and progress through the housing correction, is to reduce the cost of mortgage finance, so more families can afford to buy a home and so homeowners can refinance into affordable mortgages”  Hey I hope he’s right.  Refinancing, however is going to be a tough proposition for large numbers for Florida mortgage borrowers.  Apart from the appraised value problems, we also have the problem of much tougher standards - for instance - these 5.5% rate that people talk about available today - are only for people with high credit scores and equity in their problems.  A Florida mortgage borrower with high 600 credit scores, in the past just fine credit scores, is going to pay a higher rate than 5.5%.  Also, after the first quarter of the New Year, thanks to Mario Cuomo, Jr., all lenders are going to have to order their appraisals through national wholesalers.  We are going to end up with a nameless faceless appraiser from 2 counties away that was next on the list - we will have no idea as to their competency - we will have difficulty getting them to correct errors and we will lost the ability to ask the appraiser - will this work?  No, we will have to collect the money, find out it won’t work and have the unpleasant task of phoning up the client and telling them, sorry we are dead before we are start and I’m sorry it cost you $400 to find out.  I don’t think it is the least bit wrong to do pre-research, especially in this market, to find out ahead of time if deals are feasible.  We are not influencing the appraiser - we don’t put pressure on them - we just ask if it can happen.  If they say forget about it - we let the client know and their is no pain.  This is the thing I fear the most of all the changes - the national wholesaler appraisal.

Anyway - get your refi’s in now before this becomes mandatory.  Email us for a Good Faith Estimate or to discuss your particular scenario.  We have never had a complaint lodged against us - we are THE most honest company out there.  Courage!