Doom and Gloom?

Terry Johnson, from OMT Mortgage, thinks that people who see nothing but gloom and doom when looking at the real estate market arent looking at the market correctly. Our local market is solid. Values continue to rise at around 6.5% a year. There certainly is a segment of buyers that could have qualified for a sub-prime loan a year ago, but can’t buy a home today. If you have poor credit history and too much debt, you probably won’t be buying a house until you fix that. Contact a good loan officer for advice. Here’s how the mortgage system works (simplified): Banks loan out money and take back mortgages. If they kept it up, the vaults would be full of mortgages, and they would be out of money. So banks package up and sell mortgages on the “secondary mortgage market”. That secondary market is in a real slump. Foreclosures have left too many investors holding the bag on those mortgages they had invested in, so they have shied away from mortgage backed securities with their investment money. That’s left the banking industry short on cash for new mortgages