2011 was a difficult year in the mortgage business. We are all still standing, and you can still get mortgages, but it is not fun. I would like to make some 2012 mortgage predictions:
1. Fannie Mae and Freddie Mac will raise the down payment requirement for investor loans from 20% down payment to 25% down payment.
2. Fannie Mae and Freddie Mac will raise the equity requirement for investor refinance loans from 25% to 30%.
3. The incumbent Democratic President will win re-election, but the Republicans will take back the Senate, further housing policy stalemates will ensue.
4. People will cancel their cable TV subscriptions in droves, and will replace it with a TV antenna for local channels, and various internet fed entertainment like Hulu, Netflix, AppleTV, etc. How is this related to the mortgage business? It is not.
5. Apple without Steve Jobs will still be Apple, but we’ll all miss him. How is this related to the mortgage business? It is not.
6. Local, State and National governments the world over will realize they took it too far, and now can’t pay it back. The inevitable downsizing will follow. How is this related to the mortgage business? Because Fannie Mae and Freddie Mac are controlled by the government now, government’s role in mortgages will change as a result. It may grow, or it may recede, but it will change.
7. Interest rates will be about the same all year, they may rise a small amount. Good news in that mortgage money will remain cheap!
8. Obtaining a mortgage will remain a messy proposition, but not impossible. Patience is rewarded. High loan-to-value loans are still available, don’t be shy.
9. A Republican controlled Senate and House will not do away with Fannie Mae and Freddie Mac, but they will not pass the Conforming High Balance loan limits of $625,500 into 2013. 2012 will be the last year for these loans from $417,001 to $625,500. Get em while their hot.
10. I will narrowly avoid quitting my job to go sell tacos out of a roadside truck, and will decide to stick around, and continue to do mortgages since its all I know.
Have a great 2012 everyone!