Mortgage rates for July 14, 2008.  Loan amounts up to $417,000:

7/1 ARM              5.625%

10/1 ARM            5.750%

30 Yr Fixed          6.000%

All rates offered to the borrower with 1 point cost.  Rate quotes assume a purchase transaction with a 20% down payment, 720 credit score, and full income qualification.  Rates are subject to fluctuation.  Custom rate quotes and rate lock advice are available by calling at the number below..

MORTGAGE RATE TREND:

Next 7 days:       Neutral 

Next 30 days:      Higher 

Next 3 months:    Higher

Senator Schumer (NY) caused an old-fashioned bank run when he wrote a letter to the San Francisco Fed President concerned about IndyMac Bank's ability to weather the storm....then, he made that letter public. IndyMac Bank ceased new loan operations, in an effort to manage the loans they have on their books, on Monday. On GFriday, the Feds closed IndyMac Bank down.

This was political grandstanding at its worst:

Sen. Schumer rejected that, saying that, while banking regulators do their work in private, lawmakers typically do theirs in public. Sen. Schumer, the head of Senate Democrats' re-election effort, threw in a political jab as well. "Clearly what was happened here was the OTS, having the second-biggest bank failure on their watch, sought to blame the messenger. In sum, it's sort of classically what this administration does. Blame the fire on the guy who called 911."

The New York Times asked if Fannie Mae and Freddie Mac were insolvent and Wall Street went nuts.  Treasury Secretary Paulson stepped in and offered government support SHOULD the big mortgage guarantors fail. Are Fannie and Freddie too big to fail?  Well, they insure almost half of this nation's $12 trillion worth of mortgage debt.  A failure would be a major disruption to housing capital and drive mortgage rates to the a MUCH higher level.

Mc Cain offered that this disruption in capital would be a blow to our economy:

Fannie Mae and Freddie Mac ``are vital to Americans' ability to own their own homes,'' McCain said in response to a reporter's question during a campaign stop at a diner in Livonia, Michigan. ``They will not fail; we cannot allow them to fail.''

Obama was somewhat tenuous about Federal intervention:

But Obama advisor Jason Furman issued a statement that Obama believes "the challenges facing Fannie and Freddie are part of the broader weakness in our economy." He blamed President Bush, saying "willful neglect" by the White House of trouble in the housing market and other sectors of the economy let the problems fester to crisis stage. Then he pushed Obama's call for immediate congressional action to help homeowners caught in the bind, and at risk of foreclosure.

Ya following this?  Rather than address the problem with potential solutions, Obama's busy pointing fingers.  By discrediting Bush and continuing this credit crunch, the Democrats position themselves uniquely as the "savior" this November.  A few more public letters from Friends of Obama (FOO) and you've got a Depression-like crisis on your hands.

Was it all Alan Greenspan's fault? He's predicting a recession in his retirement. Greenspan is the Fed Chairman who adopted the "easy money" policy after 9/11/2001.  This inflated the housing market and caused Wall Street to reach for yield through acquisition of risky mortgages.  Those loans defaulted and the balance sheets of Wall Street firms and mortgage lenders have imploded.

Alan's buddy, Fed President Bill Poole, thinks we ought to nationalize Fannie and Freddie because it's inevitable.  This former Fed official is pontificating from the faculty of the University of Delaware.

Ben Bernanke, George Bush, and Hank Paulson are the ones trying to clean up this mess.  As much as I want to levy the blame on Greenspan and Co., I can't.  I wish Alan and Bill would shut up and stop the Monday morning quarterbacking but I still won't point the finger at them.

So...who's to blame for this financial mess? 

Osama bin Laden is.  More on that some other day.  Today, consider the mortgage you have and ask yourself if you can live with it for five years.  If it works, stay put.  If you think you'll need more liquidity or a different type of loan, call me.  I believe the window of opportunity is open until the end of the summer at best.