Over the last 35 years, banks have taken their residential loans, bundled them together, and sold them to investors. So long as investors felt confident and could predict profitability, the mortgage market thrived. But, then lenders loosened guidelines. Rates went up and property values flattened. As a result, foreclosures increased, producing an unfortunate domino effect. Even the recent half-point rate cut by the Fed, which is pro-growth and helpful in many ways, particularly on short-term debt, can’t immediately restore investor confidence and liquidity to the market.

There is good news, however. Based on my 20+ years of experience, the market for home loans will come roaring back (it’s an extremely profitable business for banks) in 6-12 months. In the meantime, banks are pumping up their efforts to bring in deposits. Why? Today’s deposits will become tomorrow’s loans. The cycle continues, in its own healthy way.

So, what if you need a loan today? What’s the solution?

One solution that I currently recommend to some of my clients is to simply buy down the rate. By paying points, we can drive down the interest rate from 6.75% to as low as 6.00%, for example, on a 5-year, interest-only loan. You might also want to consider a home equity line of credit now that short-term rates are competitive.

The best solution to finding and closing a competitive home loan is to work with an experienced and sophisticated mortgage adviser, one with the resources and knowledge to close a deal in virtually any market. Cohen Financial Group is an independent and highly objective mortgage originator with exclusive banking relationships, direct lending and private equity resources. These resources need to lend money to qualified buyers. It takes more work these days, but we do a thorough job of providing and packaging everything a lender needs to say, “yes!” to a loan. I have been the #1 mortgage originator in America* in five of the last eight years, including 2006 (*Mortgage Originator magazine, April ‘07), thanks to my resources and our buttoned-up, 24/7 loan packaging process.

No matter what your goals are, residential or commercial, I’m confident that we can find the perfect solution for you from among our range of options and programs. Give us a call today at 310-777-5401 to discuss your specific needs. Together, we can make deals close and doors open.

 

Best regards,

Mark H. Cohen