If the Fed Lowers rates again ....

[cobra de capell]

Originally Posted by 4RE KLR

If the Federal Reserve lowers interest rates again do you think it will be considered yet another bailout?

I think the Fed should not lower rates just yet. I know they will need to eventually but if they do it too soon the mortgage companies still will not keep the adjustable rates down. They are set to increase this year and when they do so many Americans will loose their homes.

I am wondering what everyone else thinks here. I am not trying to start a fight with anyone. Please try to be constructive. If this get to being a mad house I will ask Ron and Jamo to close it down. I am asking a serious question and I hope every one will respond accordingly.

I am in the new home construction business and this has hurt our industry terribly bad. We are all paying the price.

How can we fix this without lowering Interest rates?

Actually, it's not a FED increase in rates that will cause homeowners to loose their homes as any increase will be relatively small, it's the fact that billions in sub-prime loans are scheduled to adjust to market rates in a few months and throughout 2008 - billions and billions. That increase may be, for example, from 2% to 8% either immediately or over a period of 6 months to a year. That's a huge increase for a homeowner, but it's also an increase that they signed up for.

This entire issue is simple - those who were involved in the transaction - lender and buyer need to come to terms, without help from us - the lender either lowers the rate adjustment or takes the house if payments are not made. The buyer simply purchased something that they cannot afford, oh well.