Pinch Hitting

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 Now that Kris has documented her deteriorating physical condition to the world (see previous Post), the sympathy messages are pouring in. The least I can do is pitch in around the home-front while she is swimming in the depths of self pity and feeling really icky. The really sick part about this is what she would appreciate most from me right now – A substitute blog post. Off the bench I come.

I usually don’t do well under this kind of severe pressure, but I have about 15 minutes to pull this off before she drags herself back into our office and starts another post. If I am successful, I may get her to go back to bed and have a chance at tomorrow.

So this is my opportunity to throw my hat into the ring that is already full of hats from all those who have dissed the governments economic incentive/recovery plan. Let me be the 10 millionth person to say that the rebate concept sucks and won’t work. It’s pocket change, nothing more. But it’s politically “necessary”, especially in an election year. Who would oppose it, even though it will have no more beneficial value than the Doc telling Kris to take two aspirin and call him in the morning.     

The increased conforming loan limits, now that’s another story. For San Diego it’s equivalent to an announcement that a couple of Fortune 100 companies have decided to move here (no wait, that’s nirvana). With an average sale price of over $712,000 last year (SANDICOR) it does not take a math degree to figure out that this will help a lot of people here.  Which brings me to the mortgage issue.

According to the “Average rates and indexes” (Federal Reserve Statistical Release  H-15, whatever that is) in the San Diego Union last Sunday, conforming loan rates last week were 5.51% w/1.2 points. Nonconforming loan rates were 6.53% w/1.2 points. It’s obvious that with an average savings of 1%, or more, many more buyers will be able to come off the sidelines, maybe just in time for American Homebuying Day.

What really amazed me, though, was that the FHA/VA rate was 6.58% w/1.9 points. Excuse me? Does any one else see the cruel irony? Here we have two government programs that were established first and foremost to help qualified but lower income borrowers and our veterans and they are offering loans at the highest rates around.

How about this? Maybe instead of sending $150 billion in meaningless checks out this spring, the government ought to take those funds and offer to subsidize/buy down the interest rates for the tens of thousands of veterans who have given up so much for the rest of us. BTW- In the interest of full disclosure, I proudly count myself among them. I have never been able to take advantage of my GI Bill – VA loan benefit because the rate has almost always been higher than prevailing rates. Now it’s higher than the rate for a non-conforming loan! That’s gratitude for you.

I would enjoy hearing from the mortgage experts out there who may be able to explain this. I would certainly be interested in knowing why the government is offering a “penalty” rate to our veterans. Disgraceful.  

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