Appraisal Ace Blog

Everyone needs to have a blog. That's what I heard today from a very savvy lady from a home inspection company.

So with that in mind, this is the first post in what should be an informative and interesting blog for myself, at least, and hopefully for those who choose to read it.

The Fed met today and after the Fed's half-point reduction in September, most investors expect the central bank to deliver a quarter-point cut at the conclusion of its two-day meeting on Wednesday.

Remember to warn your clients that this rate cut is for short term rates and will not directly affect mortgage rates in the immediate term. In fact, mortgage rates may see a slight increase over the short term before returning to present levels after a few weeks.

What may be affected is the adjustable rate being charged to current owners of HELOCs. That is good news for me. I have a HELOC in the primary and secondary position.

To no one's surprise the Fed lowered the overnight fund rates today, relieving some investors' fears about an imminent declining economy. The Fed stated after the decision that apparent risks to the financial markets from the summer's credit crises have eased.

This, to me, was a surprising comment considering that we may not have seen the worst of the mortgage market fallout yet.

The Fed's comments about inflation indicated that the central bank would be able to return to somewhat more normal worries in the coming month and focus less on the upheaval in the credit markets than when it met last month.

In addition to lowering the federal funds rate, the Fed also trimmed the discount rate by a quarter-percentage point to 5 percent.

Questions remain, however, given the comments by the Fed about the credit crisis easing. Has the Fed decided to abandon the housing and credit crisis to heal itself? And should they, given the fact that the rest of the economy remains strong?