Fed's .25% cut just not enough

From car sales to Real Estate, the .25 point drop just doesn't seem to be enough to ratchet up the sales. In RI the depreciating home values have made it tougher to find home equity loans. Increased foreclosure rates have lent to a wider economic slow down.

What will it take to get get back in to the marketplace? Those that have been sitting on the sidelines could take advantage of still historically low rates (boy does that sound "canned", people now just expect rates to be low!) and corrected home values. In theory it sounds good. Much better than the '90's atleast.

A personal example: I have a client who would greatly benefit by refinancing, but won't unless he can get a cashout Zero point loan at 5.75% or better. Now, last week I could have delivered a rate of 5.875% with .25 of a discount point that would have saved hime just shy of $400/month. They are relatively young (early 50's) and plan on staying in their home for a minimum of 10-15 years. Based on their monthly income, $400/month is a HUGE number. Ultimately, I'll find a way to present the loan that will help them move forward as it just makes sense.

Back to the rate cut. Local experts feel it wasn't enough to change the feelings surrounding the mortgage crisis coupled with increasing energy costs. But atleast Fannie Mae made it tougher to get a good rate with a sub 680 credit score (tongue in cheek)...that helped.

Not!

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