About West Los Angeles' Pacific Palisades

Is time running out on the long-running mortgage rates decline of 2009?

While rates have been steady for a while, the long-term outlook could look more and more like an inflationary one, which should trigger higher mortgage rates before too long. That means higher interest payments for mortgage customers.

Opinions as to where our economy is headed for are conflicting and even contradictory. Some claim that deflation threatens our economy. Some, on the other hand, believe that the real threat to the U.S. economy is inflation, even hyper-inflation.

I tend to believe that once we are truly out of the current recession ("Main Street" recovery, not "Wall Street"), and unemployment is back to average historical level ( it may take a few years,) our economy will experience "contained" inflation. Increased global demand for agriculture commodities, and higher oil prices due to systemic weak dollar, will force the Federal Reserve to raise rates to keep rising inflation at bay.

That's why sooner than later rates are poised to rise.

Here is my question. How long will it take for mortgage rates to go up again, and why?

I look forward to your comments and opinions.

ANSWER:

THIS IS OLD LAW. IT NO LONGER APPLIES No rollover, no more over-55 rule.

The rollover or once-in-a-lifetime options were replaced with the current per-sale exclusion amounts under the Taxpayer Relief Act of 1997.

Before May 7, 1997, the only way you could avoid paying taxes on your home-sale profit was to use the money to buy another, more-expensive house within two years. Sellers age 55 or older had one other option. They could take a once-in-a-lifetime tax exemption of up to $125,000 in profits. And in all instances, there was tax paperwork (to fill out to show that you followed the rules.

Now when you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, $500,000 if you're married, and not owe any capital gain taxes every time you sell a home. And there is no more age requirement.

Many of us, mortgage originators and Realtors are experiencing the negative impact of new appraisal rules. The Home Valuation Code of Conduct, or HVCC, forced on the industry by State Attorney General Andrew M. Cuomo, are slowing down sales and mortgage process.

The change came as a result of the mortgage and housing crisis. Many decision makers blamed the crisis in part on inflated valuations. The new rules are preventing mortgage lenders and brokers from ordering an appraisal directly to avoid influencing or pressuring the appraiser to come up at the desired valuation.

Today most lenders are using independent, third-party appraisal management companies. These companies are middlemen, taking requests from lenders and farming them out at random to individual appraisers.

So now, under current rules, individual loan officers and mortgage brokers, who may benefit from the loan, are no longer allowed to choose, hire, pay, or even communicate with appraisers.

Real estate agents also cannot choose, retain or compensate appraisers, but they can talk to them and provide information or address problems.

I believe we need to demand from policy makers that they modify the new Home Valuation Code of Conduct taking into consideration feedback and recommendations from real estate and mortgage professionals, appraisers, and consumers.

1. In order to avoid ending up with a very few large national appraisal management firms, lenders should be required to limit the volume of appraisal orders to a single appraisal management firm to 20%.
2. Consumers need to have the opportunity to use the same appraisal report with different lenders. The current system makes it near impossible for the consumers to reuse the same report in the event the first lender who ordered the appraisal declined the loan or offered terms unacceptable to the borrower. Right now the consumer has to pay for a new report, or waste a lot of time waiting for the lender to "release" the appraisal report to another lender.

There are many other changes that are required to better protect and serve consumers. Right now I am suggesting you do what I did which is to sign an online Petition to Rescind HVCC has it stands today. Yes, we need change but we need the kind of change that will really benefit consumers instead of policy changes imposed by overreacting politicians.

Please click on the link below if you want real change.

www.hvccpetition.com