By Tim Barnes, Capital City Mortgage
We’ve all heard about the so-called Mortgage Meltdown, hyped so widely in the news. And here in Atlanta, you would have to be in a shell to not hear about the handful of local mortgage companies that have closed up or filed for bankruptcy.  In order to get your arms around these seemingly linked happenings, you really need to understand how these things are linked together, and how they are completely unrelated.  Let’s start nationally and finish locally. The Mortgage Meltdown is overblown and the worst of it is over.   The marketplace will correct itself in due time by itself and with the help of the Federal Reserve to some degree.  Let’s face it, there were mortgage companies figuring out a way to close a deal with borrowers whom were not qualified to rent an apartment.  Loan Officers in a hurry for their next commission check, were doing stated income and stated asset loans for folks with the flawed idea that stated income meant “State the income so that the loan will be approved.” These people knew full well that these borrowers would not be able to afford to make even the first payment on their new mortgage.  As these loans were “packaged” with other loans to be sold off to investors, and too many defaulted, the investors said “Thank you very much but you can have these loans back!”   The originating companies don’t have the kind of deep pockets to buy them, hence the “meltdown”.  As a mortgage loan originator, some of these “lenders” would come into our office with their new more liberal guidelines and we would shake our heads and say, “are you serious? 520 credit scores, one month out of bankruptcy and you’ll do a 100% loan?”  No wonder this happened.The mortgage companies have seen the problems in the creative loans they were offering and are now doing loans that make sense.  Rates today for a 30 year fixed rate loan are 6% or under.  The shady lenders are being exposed and the cream will rise to the top.  The economy is strong.  Everyone needs to take a deep breath; things are going to be fine.  If you are sitting on the fence waiting for rates to improve, or for prices of homes and condos to fall, you may be missing an opportunity.  Prices will fluctuate in all real estate markets, but the Atlanta market seems to be a bit better insulated than most.  We have been in a steady growth mode for so long here in Metro Atlanta. that homeowners have gotten used to consistent gains in home valuations.  That may slow down a bit I think, but a collapse is not imminent.If you have good credit, equity in your home, and some money in the bank,  now is a great time to buy or step up to the next house.  There are great deals right now for homes and mortgage loans.  Don’t sit on the sidelines and let another wave pass you by. If your current rate is over 6.25% you may want to evaluate if a refinance make sense.