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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Gary Burton who wrote (86889)	8/24/2007 10:13:09 AM
From: Think4Yourself	Read Replies (1) \| Respond to of 306849

Fannie and/or Freddie changed their desk underwriting programs about a month ago to implement the stricter fed guidelines. All the lenders knew about this, and there was a lot of justified concern that borrowers in the pipeline would be refused once this happened. As a result the mortgage pipelines were flushed just before this happened. The result there was a surge in mortgages, and the borrowers had to close before the mortgage timed out or potentially lose their ability to get a mortgage for that amount. Result: a highly predictable surge in sales. Next result: Next month's sales will drop off a cliff. The pipelines are empty and standards are also now tougher. Note that this is a different situation that the credit markets tightening and interest rates rising, which has happened since then. We probably just saw the biggest sales number for the next 12 months, and it was in one of the slowest months. The good news is that should be the last of the crap mortgages that the GSE's accept.