Lowell Deeds

The latest on real estate recordings and new technology from the Middlesex North Registry of Deeds in Lowell

September 14, 2007

Fed Meets Next Week

by @ 8:27 am. Filed under Real Estate

The Federal Reserve meets next week and is expected to cut its federal funds rate by a half a point. This has generated some optimistic chatter here at the registry where those in the real estate professions long for a recovery of the housing and refinance markets. Unfortunately, I don’t see such a rate reduction as having much of an impact. The immediate problem for homeowners in distressed situations is that they owe more than the house is worth. That means they cannot borrow enough money to pay off the underlying loan regardless of the interest rate charged on the new note. And for those who do have sufficient equity to support a new loan, I believe the obstacle is the availability of new loans, not the amount of the monthly payment. After a few years of reckless practices, the lending industry has now found religion and has adopted hyper-stringent standards in a reactionary sort of way. On top of this, it seems that consumer pessimism is rising which means that many who could obtain loans will not seek them as they hunker down for better times.

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