Robert Gross, managing director of a financial advisory firm in Burlingame, Calif., hopes to refinance and lock in a rate as low as 4.5 percent within the next two weeks. To get ready, he provided his mortgage broker with two years of tax returns, plus copies of bank accounts, brokerage accounts and pay stubs.
"They're not taking your word for anything nowadays," he said.
You mean, they're not just giving away the money with a smile and a nod anymore? How awful! We should force them to give risky loans to dubious, underqualified people! They should make the loan application process so easy that even a convicted felon with no credit history can easily apply and get approved for at least $200,000!
The problem, as I see it, is that the Fed printing money doesn't seem like a good way to thaw the banks. Their plan in printing money (over 1 trillion dollars in new cash), rather than to thaw up lenders, is instead to drive the interest rate down even further, encouraging more people to apply for mortgages. While this would, in effect, stimulate the economy, it can only do so if the banks were to return to their 2000-2005 era policy of giving anyone who wanted it a carload of cash. Hopefully, the banks have learned their lesson.
The Fed apparently hasn't.