HSH on the Radioby Tim Manni
On Monday, HSH VP Keith Gumbinger was the guest on Chicago’s WBBM Noon Business Hour. Mr. Gumbinger joined ‘Business Hour’s’ hosts Sherman Kaplan and Regine Schlesinger to talk about the current conditions in the home equity lending market.
Schlesinger led off the discussion by asking our VP if there’s more to the home equity lending problem than just falling home prices. “That’s kind of the linchpin for all the issues facing home equity lending we’ve seen,” said Gumbinger. Declining prices have wiped out the value of many homes, effectively erasing equity for some, while causing others to go underwater.
What about borrowers with good credit, are they still experiencing these same problems? The short answer’s yes, said Gumbinger. Even borrowers with good credit have seen their lines of credit curtailed, which makes things like finishing home improvement projects or financing higher education far more difficult.
What’s the future for mortgage rates as we moved closer to 2010? Kaplan asked Gumbinger whether or not he sides with current reports that say home loan rates are due to rise come 2010.
“If we want to ever get back to normalcy, we should expect to see some higher rates as a result,” said Gumbinger. With many Federal programs that support mortgage rates — and to a greater extent the housing market as a whole — coming to an end in 2010, higher rates will be the inevitable result.
Kaplan closed out the interview by asking what the “blank check” that Fannie and Freddie received from Washington means to the mortgage industry moving forward. The one thing it does do, said Gumbinger, is allows the GSEs to operate without the market worrying that their losses will impact them.
Click here to listen to Monday’s episode of the Noon Business Hour.