Has the Tsunami passed us?

Given what has happened in the mortgage industry and the world economy in the last few weeks, we're truly in a historical time. Most of the recent activities in the capital market have been driven by fear, and everyone has been looking to the Federal Government for re-assurance. Today, the Fed has finally lived up to the expectations by announcing .5% rate cut in the Fed Discount Rate.

What does that mean for the consumers and homeowners? Well, we haven't seen a direct impact yet as the mortgage prices and rates are unchanged today. Indirectly, the Fed's move has sent a positive message to the lenders that the "liquity crisis" may be over, at least for now. With the lower cost of money, lenders will now able to borrow money again to loan to consumers. Many economists are expecting further rate cut later in the year. However, the one thing that consumers need to understand and keep in mind is that while rates may improve a bit in the coming months, general lending guidelines will definitely continue to be tighter and stricter. This unfortunately means for some consumers, they will have more difficulty obtaining a loan, whether it's a purchase or refinance.