Upon Further Review

I've been saying for a long time that things in the mortgage market are not as bad as they are being made out to be, and that might be true. And I am now forced to admit that it might NOT be true, as well.

Fannie Mae last week changed its accounting practices, almost certainly in an attempt to disguise the true number of foreclosures on its books. Today Freddie Mac announced that its foreclosures were going to cut its market valuation by almost 25%. We've seen lots and lots of losses by banks over the past little while, and the market has priced a lot of that in, but this is different. Fannie and Freddie are the mortgage clearinghouse for the entire industry. If they are forced to contract their services, then it won't matter any more if you have good credit or not, and it won't matter if you have cash or a job or a letter from the Queen of Sheba, you won't be able to get a loan at a decent interest rate.

And if that happens, we're not looking at a recession. We're looking at a depression.

Now, you know me, and I'm not an alarmist. I think everything will work out well in the end. The short term, however, is not going to be pretty, and I think that's established now. I have, therefore, some advice:

If you've been thinking about buying a house, or refinancing, or getting a line of credit, or anything at all real-estate related, do it now. Right now. Do not wait until Thanksgiving is over. Do not wait for the first of the year. Do it right now. If you have an ARM, get off it. Get off now. It doesn't matter how you have to do it or if your rate rises or if you have a prepay penalty. If you can get out of it, get out of it.

I had planned to stop working tomorrow at noon for the Thanksgiving holiday, which is my favorite. I will not be answering the phone over the weekend. But I will be answering email and if you text me, I'll get it. Email is chris@thechrisjonesgroup.com. Phone is 801-310-3407.

Please don't ignore this. I don't charge for advice, you all know this, and if your situation doesn't admit of help, I won't try to talk you into anything. But please call me and let's find out. And anyone you know that is in a similar way, have them call me, email me, as well.